Cash and Noncash Benefits for Persons With Limited Income: Eligibility Rules, Recipient and Expenditure Data, FY1996-FY1998
Congressional research reportDec 15, 1999
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Cash and Noncash Benefits for Persons With
Limited Income: Eligibility Rules, Recipient and
Expenditure Data, FY1996-FY1998
December 15, 1999
Compiled by: (name redacted)
Specialist in Income Maintenance
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress
ABSTRACT
This report provides basic eligibility rules, recipient numbers, and FY1996-FY1998
expenditure data for 80 programs that have provided cash or noncash benefits to low-income
persons. It summarizes spending trends by income-tested programs since FY1968, by form
of benefit and level of government.
Cash and Noncash Benefits for Persons With Limited
Income: Eligibility Rules, Recipient and Expenditure Data,
FY1996-FY1998
Summary
Eighty benefit programs provide aid — in cash and noncash form — that is
directed primarily to persons with limited income. Such programs constitute the
public “welfare” system, if welfare is defined as income-tested or need-based benefits.
This definition excludes social insurance programs (e.g., Social Security and
Medicare).
Income-tested benefit programs in FY1998 cost $391.7 billion: $277.3 billion
in federal funds and $114.4 billion in state-local funds. Total welfare spending rose
by 3.1% from its FY1997 level. Higher medical spending accounted for $10.3 billion
of the year’s net increase of $11.8 billion and, for the first time, medical benefits
accounted for half of all income-tested spending. Expressed in constant FY1998
dollars, welfare spending increased by $5.8 billion (1.5%). Real spending increases:
medical benefits, 3.9%; services, 5.4%; education benefits, 1.8%, and housing aid,
0.6%. In real terms, cash benefit outlays held steady, but spending for food aid, jobs
and training, and energy assistance declined. Welfare consumed the same share of the
federal budget (16.8%) as in FY1997, but accounted for a slightly smaller share of
gross domestic product (4.6% compared to 4.7% in 1997).
In FY1998, medical services represented 50.1% of total welfare spending; cash
benefits, 24.1%; food and housing benefits, 16.6%. Services, energy aid, education,
and jobs/training accounted for the remainder. The composition of welfare spending
differed by level of government. Medical aid consumed 72% of state-local welfare
funds, but only 41% of federal welfare dollars.
Most income-tested programs provide benefits, in the form of cash, goods, or
services, to persons who make no payment and render no service in return. However,
in the case of the job and training programs and some educational benefits, recipients
must work or study. Further, the block grant program of Temporary Assistance for
Needy Families (TANF) requires adults to start work after a period of enrollment, the
food stamp program imposes work and training requirements, and public housing
requires residents to engage in “self’sufficiency” activities or perform community
service. Finally, the Earned Income Tax Credit (EITC) is available only to workers.
An unduplicated count of welfare beneficiaries is not available. Enrollment in
Medicaid, AFDC, and food stamps has declined from 1994/1995 peak levels, but the
number of recipients of EITC and Supplemental Security Income (SSI) continues to
grow. Average 1998 monthly numbers: Food stamps, 21 million; TANF, 8.8 million;
and SSI, 7.2 million. In 1998, EITC payments went to an estimated 58.2 million
persons, and in 1997, 40.4 million persons received Medicaid services. The Census
Bureau classified 34.5 million persons as poor on the basis of pre-tax money income
in 1998 and found that 69.2% of them were in households that received some incometested aid other than the EITC. Among male-present families with children who were
poor before transfers, the EITC was the main form of aid.
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Income Tests of the Benefit Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Poverty Thresholds and Other Measures of Need . . . . . . . . . . . . . . . . . . . . . . . 27
Catalog of Programs Offering Cash and Noncash Benefits to Persons of
Limited Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Medical Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
1. Medicaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2. Medical Care For Veterans Without Service-Connected Disability . . . . . . . 45
3. General Assistance (Medical Care Component) . . . . . . . . . . . . . . . . . . . . . . 47
4. Indian Health Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5. Maternal and Child Health Services Block Grant, Title V of the
Social Security Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6. Consolidated Health Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7. Title X Family Planning Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8. The State Children’s Health Insurance Program (S-CHIP) . . . . . . . . . . . . . 56
9. Medical Assistance to Refugees and Cuban/Haitian Entrants . . . . . . . . . . . . 60
Cash Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
10. Supplemental Security Income (SSI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
11. Earned Income Tax Credit (EITC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
12. Temporary Assistance for Needy Families (TANF) and Aid to Families
with Dependent Children (AFDC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
13. Foster Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
14. Pensions for Needy Veterans, their Dependents, and Survivors . . . . . . . . . 80
15. General Assistance (Nonmedical Care Component) . . . . . . . . . . . . . . . . . . 81
16. Adoption Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
17. General Assistance to Indians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
18. Cash Assistance to Refugees and Cuban/Haitian Entrants . . . . . . . . . . . . . 87
19. Dependency and Indemnity Compensation (DIC) and Death Compensation
for Parents of Veterans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
20. Emergency Assistance (EA) to Needy Families with Children . . . . . . . . . . 90
Food Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
21. Food Stamps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
22. School Lunch Program (Free and Reduced-Price Segments) . . . . . . . . . . . 98
23. Special Supplemental Nutrition Program for Women, Infants, and Children
(The WIC Program) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
24. Child and Adult Care Food Program (Low-Income Component) . . . . . . 102
25. School Breakfast Program (Free and Reduced-Price Segments) . . . . . . . 104
26. Nutrition Program for the Elderly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
27. The Emergency Food Assistance Program (EFAP/TEFAP) . . . . . . . . . . . 108
28. Summer Food Service Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
29. Commodity Supplemental Food Program (CSFP) . . . . . . . . . . . . . . . . . . 111
30. Food Distribution Program on Indian Reservations . . . . . . . . . . . . . . . . . 112
31. Special Milk Program (Free Segment) . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Housing Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
32. Section 8 Low-Income Housing Assistance . . . . . . . . . . . . . . . . . . . . . . . 115
33. Home Investment Partnerships Program (HOME) . . . . . . . . . . . . . . . . . . 119
34. Low-Rent Public Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
35. Rural Housing Loans (Section 502) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
36. Section 236 Interest Reduction Payments . . . . . . . . . . . . . . . . . . . . . . . . 127
37. Rural Rental Assistance Payments (Section 521) . . . . . . . . . . . . . . . . . . . 129
38. Rural Rental Housing Loans (Section 515) . . . . . . . . . . . . . . . . . . . . . . . 130
39. Homeownership and Opportunity for People Everywhere (HOPE)
Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
40. Rural Housing Repair Loans and Grants (Section 504) . . . . . . . . . . . . . . 134
41. Section 101 Rent Supplements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
42. Section 235 Homeownership Assistance for Low-Income Families . . . . . 136
43. Rural Housing Self-Help Technical Assistance Grants (Section 523) and
Rural Housing Site Loans (Sections 523 and 524) . . . . . . . . . . . . . . . . . 138
44. Farm Labor Housing Loans (Section 514) and Grants (Section 516) . . . . 140
45. Indian Housing Improvement Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
46. Rural Housing Preservation Grants (Section 533) . . . . . . . . . . . . . . . . . . 144
Education Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
47. Federal Pell Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
48. Head Start . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
49. Subsidized Federal Stafford and Stafford/Ford Loans . . . . . . . . . . . . . . . 151
50. Federal Work-Study Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
51. Supplemental Educational Opportunity Grants . . . . . . . . . . . . . . . . . . . . 155
52. Federal TRIO Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
53. Chapter 1 Migrant Education Program . . . . . . . . . . . . . . . . . . . . . . . . . . 159
54. Perkins Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
55. Health Professions Student Loans and Scholarships . . . . . . . . . . . . . . . . 161
56. Leveraging Educational Assistance Partnerships (LEAP) . . . . . . . . . . . . 164
57. Fellowships for Graduate and Professional Study . . . . . . . . . . . . . . . . . . 166
58. Migrant High School Equivalency Program (HEP) . . . . . . . . . . . . . . . . . 168
59. College Assistance Migrant Program (CAMP) . . . . . . . . . . . . . . . . . . . . 169
60. Ellender Fellowships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
61. Social Services Block Grant (Title XX) . . . . . . . . . . . . . . . . . . . . . . . . . 172
62. Child Care and Development Block Grant . . . . . . . . . . . . . . . . . . . . . . . . 173
63. Homeless Assistance Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
64. Community Services Block Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
65. Legal Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
66. Social Services for Refugees and Cuban/Haitian Entrants . . . . . . . . . . . . 180
67. Emergency Food and Shelter Program . . . . . . . . . . . . . . . . . . . . . . . . . . 181
68. Child Care for Recipients and Ex-Recipients of Aid to Families with
Dependent Children (AFDC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
69. “At-Risk” Child Care–to Avert Eligibility for Aid to Families with
Dependent Children (AFDC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
Jobs and Training Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
70. Job Corps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
71. Adult Training Program (JTPA Title II-A) . . . . . . . . . . . . . . . . . . . . . . . 189
72. Summer Youth Employment and Training Program . . . . . . . . . . . . . . . . 191
73. Senior Community Service Employment Program . . . . . . . . . . . . . . . . . . 193
74. Youth Training Program (JTPA Title II-C) . . . . . . . . . . . . . . . . . . . . . . . 195
75. Foster Grandparents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
76. Senior Companions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
77. Welfare-to-Work Grants and Job Opportunities and Basic Skills
Training Program (JOBS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
Job Opportunities and Basic Skills Training Program (JOBS) . . . . . . . . . . . . . 201
78. Native Employment Works Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
Energy Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
79. Low-Income Home Energy Assistance Program (LIHEAP) . . . . . . . . . . 206
80. Weatherization Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
List of Tables
Table 1. Expenditures of Major Need-Tested Benefit Programs,
FY1996-FY1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Table 2. Programs with Billion-Dollar Total Expenditures, FY1998 . . . . . . . . . 4
Table 3. Expenditures for Income-Tested Benefits, FY1968-FY1998 . . . . . . . . 6
Table 4. Federal Spending for Income-Tested Benefits by Form of Benefit,
FY1968-FY1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table 5. State-Local Spending for Income-Tested Benefits by Form of
Benefit, FY1968-FY1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 6. Outlay Trends by Form of Benefit, FY1968-FY1998 . . . . . . . . . . . . . 13
Table 7. Income Eligibility Tests Used by Benefit Programs . . . . . . . . . . . . . . 19
Table 8. Bureau of the Census Poverty Thresholds for 1998 . . . . . . . . . . . . . . 28
Table 9. 1999 Federal Poverty Income Guidelines . . . . . . . . . . . . . . . . . . . . . . 29
Table 10. Eligibility Levels for Free and Reduced Price Meals for the Period
of July 1, 1999-June 30, 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Table 11. Lower Living Standard Income Level (LLSIL) for a Family of
Foura – Effective May 14, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Table 12. Need-Based Benefits: Expenditures and Enrollment Data, by
Programs and Forms of Benefits FY1996-FY1998 . . . . . . . . . . . . . . . . . 209
List of Charts
Chart 1. Federal and State/Local Expenditures for Income-Tested Benefits
FY1975-FY1998, in Constant 1998 Dollars . . . . . . . . . . . . . . . . . . . . . . . . 9
Chart 2. Composition of Income-Tested Benefits . . . . . . . . . . . . . . . . . . . . . . 14
Chart 3. Cash and Noncash Welfare Benefits Received by Poor Families
with Children, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
CONTRIBUTORS
This alphabetical list of programs provides the names of Congressional Research
Service (CRS) staff members who contributed program data and rules to this report.
Unless otherwise noted, each is a member of the Domestic and Social Policy Division
of CRS.
Adoption assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Adult training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
“At-risk” child care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Cash assistance to refugees and Cuban/Haitian entrants . . . . . . . . . . . Joyce Vialet
Child and adult care food program (low-income component) . . . . (name redacted)
Child care and development block grant . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Child care for AFDC recipients (and ex-recipients) . . . . . . . . . . . . . (name redacted)
Chapter I migrant education program . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
College assistance migrant program (CAMP) . . . . . . . . . . . . . . . . . . (name redacted)
Consolidated health centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sharon Kearney
Community services block grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Commodity supplemental food program (CSFP) . . . . . . . . . . . . . (name redacted)
Dependency and indemnity compensation (DIC) and death compensation for
parents of veterans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dennis Snook
Earned income tax credit (EITC) . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Ellender fellowships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Emergency assistance (EA) to needy families . . . . . . . . . . (name redacted)
Emergency food and shelter program . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Farm labor housing loans and grants . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Federal Pell Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Laura Monagle
Federal TRIO programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Federal work-study program . . . . . . . . . . . . . . . . . . . . . . . . . . . . Laura Monagle
Fellowships for graduate and professional study . . . . . . . . . . . . . . Laura Monagle
Food distribution program on Indian reservations . . . . . . . . . . . . (name redacted)
Food stamps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Foster care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Foster grandparents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Laura Monagle
General assistance (medical care and cash components) . . . . . . . . . . . . (name redacted)
General assistance to Indians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Head start . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alice Butler
Health professions student loans and scholarships . . . . . . . . . . . . Sharon Kearney
Home investment partnerships (HOME) . . . . . . . . . . . . . . . . . . . . . Bruce Foote
Homeless assistance grants . . . . . . . . . . . . . . . . (name redacted) & M. Ann Wolfe
Homeownership and opportunity for people everywhere (HOPE) Richard Bourdon
Indian health services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cecelia Echeverria*
Indian housing improvement grants . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Job corps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Legal services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Leveraging Educational Assistance Partnership (LEAP) . . . . . . . . Laura Monagle
Low-income home energy assistance program (LIHEAP) . . . . . . . . (name redacted)
Low-rent public housing . . . . . . . . . . . . . . . . . . . . . . . . . . . Susan Vanhorenbeck
Maternal and child health services block grant . . . . . . . . . . . . . . . Sharon Kearney
Medicaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lisa Herz
Medical care for veterans without service-connected disability . . . . Dennis Snook
Medical assistance to refugees and Cuban-Haitian entrants . . . . . . . . Joyce Vialet
Migrant high school equivalency program (HEP) . . . . . . . . . . . . . . . (name redacted)
Native employment works program . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Nutrition program for the elderly . . . . . . . . . . . . . . . . . . . . . . . . . . . . Paul Graney
Pensions for needy veterans, their dependents, and survivors . . . . . Dennis Snook
Perkins loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Laura Monagle
Rural housing loans (Section 502) . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Rural housing repair loans and grants (Section 504) . . . . . . . . . . . (name redacted)
Rural rental assistance (Section 521) . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Rural rental housing loans (Section 515) . . . . . . . . . . . . . . . . . . . (name redacted)
Rural housing preservation grants (Section 533) . . . . . . . . . . . . . (name redacted)
Rural housing self-help technical assistance grants (Section 523)
and rural housing site loans (Sections 523 and 524) . . . . . . . (name redacted)
School breakfast program (free/reduced price meals) . . . . . . . . . . (name redacted)
School lunch program (free/reduced price meals) . . . . . . . . . . . . . (name redacted)
Section 8 low-income housing assistance . . . . . . . . . . . . . . . Susan Vanhorenbeck
Section 101 rent supplements . . . . . . . . . . . . . . . . . . . . . . . Susan Vanhorenbeck
Section 235 homeownership assistance . . . . . . . . . . . . . . . . Susan Vanhorenbeck
Section 236 interest reduction payments . . . . . . . . . . . . . . . Susan Vanhorenbeck
Senior community service employment program . . . . . . . . . . . . . . . . Paul Graney
Senior companions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Laura Monagle
Social services block grant (Title XX) . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Social services for refugees and Cuban/Haitian entrants . . . . . . . . . . . Joyce Vialet
Special milk program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Special supplemental nutrition program for
women, infants, and children (WIC) . . . . . . . . . . . . . . . . . . . (name redacted)
State child health insurance program (S-CHIP) . . . . . . . . . . . Evelyn Baumrucker
State student incentive grant (SSIG) program . . . . . . . . . . . . . . . Laura Monagle
Subsidized Federal Stafford and Stafford/Ford loans . . . . . . . . . . Margot Schenet
Summer food service for children . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Summer youth employment program . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Supplemental educational opportunity grants . . . . . . . . . . . . . . . . Laura Monagle
Supplemental security income (SSI) . . . . . . . . . . . . . . . . . (name redacted)
Temporary Assistance for Needy Families (TANF)/
Aid to Families with Dependent Children (AFDC) . . . . . . . . . . . . (name redacted)
The emergency food assistance program (TEFAP) . . . . . . . . . . . . (name redacted)
Title X family planning services . . . . . . . . . . . . . . . . . . . . . . . . . . Sharon Kearney
Weatherization assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alice Butler
Welfare-to-work grants (for TANF recipients)
and JOBS (AFDC recipients) . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
Youth training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (name redacted)
*Cecelia Echeverria is a former member of the Domestic Social Policy Division of CRS.
(name redacted) prepared
Chart 3.
Cash and Noncash Benefits for Persons With
Limited Income: Eligibility Rules, Recipient and
Expenditure Data, FY1996-FY1998
Introduction
Eighty benefit programs provide cash and noncash aid that is directed primarily
to persons with limited income. These benefit programs cost $391.7 billion in
FY1998, up 3.1% from FY1997 and equal to 4.6% of the gross domestic product
(GDP). Higher medical spending accounted for $10.3 billion of the year’s net
increase of $11.8 billion and, for the first time, medical benefits accounted for half of
all income-tested spending. Welfare represented the same share of the federal budget
(16.8%) as in FY 1997, but a slightly smaller share of gross domestic product (4.6%
compared to 4.7% in 1997). Federal funds provided 70.8% of the total. See Table
1 for FY1996-FY1998 summary.
After adjustment for price inflation, 1998 welfare spending was up 1.5% ($5.8
billion) from that of 1997. An increase of $7.4 billion in real spending (1998 dollars)
for medical benefits more than offset declines totaling $2.7 billion for food aid, jobs
and training, and energy assistance. Real spending increases: medical benefits, 3.9%;
services, 5.4%; education benefits, 1.8%, and housing aid, 0.6%. In real terms, cash
benefit outlays held steady.
Of FY1998 welfare dollars, more than half (50.1%) were spent on medical aid.
Spending for medical aid exceeded combined outlays for benefits in all other forms–
cash, food, housing, education, jobs and training, services, and energy aid. Spending
for “human capital” programs, ones providing education, jobs and training, accounted
for less than 6% of all welfare dollars. Actual spending for jobs and training is
somewhat understated because some other benefit programs (including public
housing, food stamps, and Temporary Assistance for Needy Families) have work and
training components.
This report consists of a catalog of 80 need-based programs,1 including some
that made final outlays in FY19972 and two new programs, State Children’s Health
Insurance (S-CHIP) and Native Employment Works, a work and training program for
Indians. For each it provides the funding formula, eligibility requirements, and benefit
levels. At the back of the report a table gives expenditure data (federal and
state/local) and recipient data for FY1996-FY1998 by program.
1
The number of programs in this report is somewhat arbitrary. For example, General
Assistance, listed under both cash and medical aid, could be viewed as a single program.
2
Programs related to the repealed program of Aid to Families with Dependent Children.
CRS-2
Table 1. Expenditures of Major Need-Tested Benefit Programs, FY1996-FY1998
(millions of current $)
Federal expenditures
Medical care
Cash aid
Food benefits
Housing benefits
Education
Services
Jobs/training
Energy aid
Total
State-local expenditures
Total expenditures
FY1996
FY1997
FY1998
FY1996
FY1997
FY1998
FY1996
FY1997
FY1998
103,925
70,011
37,164
25,496
15,423
6,312
4,040
1,179
263,550
107,787
71,848
35,374
26,440
16,509
6,660
3,796
1,342
269,754
113,779
73,872
33,451
26,897
16,991
7,300
3,785
1,257
277,332
74,015
22,444
1,920
2,459
955
4,709
644
73
107,219
78,313
21,234
1,974
2,456
1,026
4,971
178
64
110,216
82,612
20,690
2,060
2,614
1,137
5,153
71
64
114,401
177,940
92,455
39,084
27,955
16,378
11,021
4,684
1,251
370,769
186,100
93,082
37,348
28,896
17,535
11,631
3,973
1,406
379,971
196,391
94,562
35,511
29,511
18,128
12,453
3,857
1,321
391,733
Note: Some rows and columns may not add to totals shown because of rounding. Program data on which this table is based are found in Table
12.
CRS-3
Nature of Programs
Most of these programs base eligibility on individual, household, or family
income, but some use group or area income tests; and a few offer help on the basis
of presumed need. Most provide income “transfers.” That is, they transfer income,
in the form of cash, goods, or services, to persons who make no payment and render
no service in return. However, in the case of the job and training programs and some
educational benefits, recipients must work or study for wages, training allowances,
stipends, grants, or loans. Further, the TANF block grant program requires adults
to commence work after a period of enrollment, the Food Stamp program imposes
work and training requirements, and public housing programs require recipients to
engage in “self-sufficiency” activities or to perform community service. Finally, the
Earned Income Tax Credit (EITC) is available only to workers.
This report excludes income maintenance programs that are not income tested,
including social insurance and many veterans’ benefits, and all but one tax transfer
program. Thus, it excludes Social Security cash benefits, unemployment
compensation, and Medicare. The Old-Age, Survivors, and Disability Insurance
programs (Social Security cash benefit programs) in FY1998 paid out almost as much
as all income-tested programs, a total of $372 billion, financed primarily from payroll
tax collections. The report also excludes payments, even though financed with
general revenues, that may be regarded as “deferred compensation,” such as veterans’
housing benefits and medical care for veterans with a service-connected disability.
The report includes one tax-transfer program, the refundable Earned Income Tax
Credit (EITC) for low-income workers with children. This credit reduces the taxes
of working families with gross income below a specified limit (in 1999, $26,928 for
families with one child, $30,580 for those with more children) and makes direct
payments (“refunds”) to those whose income is below the income tax threshold or
whose tax liability is smaller than their credit. This report treats the direct payment
component of the EITC, but not the reduction in tax liability, as a welfare
expenditure.3 Other tax benefits are excluded from the report because they are not
refundable (make no direct payments).4 Further, in most cases they impose no income
test for eligibility. Examples of these other tax benefits are the deductibility of
mortgage interest and property taxes on owner-occupied homes (causing estimated
revenue losses of $51.7 billion and $17.8 billion, respectively, in 1998). These tax
transfers increase families’ disposable income by reducing their tax liability and are
known as “tax expenditures.” (The standard deduction and personal exemption in the
income tax code also decrease families’ taxable income.)
3
Editions of this report before 1991 counted the entire EITC, both the refund and the reduced
tax liability. Historical tables in this report use only direct EITC outlays.
4
This report excludes the child tax credit, enacted in 1997 (P.L. 105-34). A portion of this
credit may be refundable for taxpayers with three or more qualifying children, depending on
the social security taxes they pay and the EITC they receive. However, in 1998, no child tax
credits were refunded.
CRS-4
Billion-Dollar Programs in FY1998
In FY1998, a total of 28 programs for low-income persons spent more than $1
billion each in federal, state, and local funds. These programs accounted for 97% of
total welfare spending, $380 billion out of a total of $391.7 billion. The list was led
by Medicaid, which alone spent $177.4 billion (45% of the total). Table 2 shows the
programs and their expenditures in FY1998.
Table 2. Programs with Billion-Dollar Total Expenditures, FY1998
($ in billions)
Federal
State/local
Total
$100.177
$77.187
$177.364
2. SSI
29.656
3.945
33.601
3. Earned Income Tax Credit (refund)
25.300
0
25.300
4. Food stamps
20.397
1.987
22.384
5. TANFa
11.286
10.227
21.513
6. Section 8 low-income housing assistance
16.114
0
16.114
7. Medical care for veterans (no serviceconnected disability)
9.603
0
9.603
8. Federal Pell grants
6.274
0
6.274
9. Foster care
3.730
3.303
7.033
10. Title XX social services
2.299
3.586b
5.885
11. Head start
4.347
1.087
5.434
12. School lunch (free/reduced price)
5.196
—
5.196
13. General assistance (medical component)
0
4.956b
4.956
14. Child care and development block grant
3.123
1.567
4.690
15. HOME (Home investment partnerships)
1.461
2.601
4.062
16. Low-rent public housing
3.899
—
3.899
17. WIC
3.896
0
3.896
18. Rural housing loans (Section 502)
3.830
0
3.830
19. Subsidized Federal Stafford and
Stafford/Ford loans
3.770
0
3.770
20. Veterans’ pensions
3.071
0
3.071
0
2.625b
2.625
1. Medicaid
21. General assistance (cash and
nonmedical)
CRS-5
Federal
State/local
Total
22. Indian health services
2.099
0
2.099
23. Child and adult care food program
1.404
—
1.404
24. Adoption assistance
.695
.590
1.285
25. School breakfast (free/reduced-price)
1.266
—
1.266
26. Job Corps
1.246
0
1.246
27. LIHEAP (home energy assistance)
1.132
0
1.132
28. Maternal and child health services block
grant
.678
.424
1.102
265.949
114.085
380.034
28-program total
Source: Data are from Table 12.
a
The TANF block grant replaced AFDC, effective July 1, 1997 at latest (P.L. 104-193).
Estimate. See footnote for this item in Table 12, p. 210.
b
Trends in Spending
Total expenditures on cash and noncash welfare programs were 24 times as great
in 1998 as in 1968 (Table 3). Even after allowance for price inflation, spending
quintupled (rising 419%) over the 30 years, a period when the U.S. population rose
35%.5 Measured in constant 1998 dollars,6 the annual rate of growth in spending over
the whole period was 5.6%. However, the growth pattern was uneven. During the
first 8 years (1968-1976) spending climbed at an annual rate of 12.9%; in the next 8
years (1976-1984) the annual rate of increase dropped to 1.7% (in 1 year, 1982, real
spending declined, and it remained below the 1981 level until 1985). From 1985 to
1995 growth resumed and averaged an annual rate of 6%. This lifted 1995 spending
to a new record high. However, real spending declined in 1996; thereafter, it turned
upward and by 1998 it almost regained its 1995 peak.
Total per capita welfare spending grew in real terms (constant FY1998 dollars)
from $376 in FY1968 to a peak of $1,491 in FY1995 and averaged $1,451 in
FY1998. In the intervening years growth was uneven. In FY1982, welfare spending
failed to keep pace with inflation, and per capita spending declined (to $879).
Although real per capita welfare spending turned upward again in FY1984, it did not
regain (and overtake) its 1981 level until 1986, when it reached $912. Each year
since then until FY1996, real per capita welfare spending set new records.
5
6
Based on the resident U.S. population.
Current dollars were translated into FY1998 constant value dollars by use of the Consumer
Price Index for all urban consumers (CPI-U).
CRS-6
Chart 1 (page 9) shows the course of expenditures for income-tested benefits
over the three decades, FY1968-FY1998. The upper line shows total spending
(federal and state-local spending); the bottom line shows state-local spending alone;
the space between represents federal spending. Throughout this period federal
expenditures accounted for more than 70% of the total. The federal share rose above
76% in 1979-1980, then began a general decline. Since 1991, it has been below 72%.
Table 3. Expenditures for Income-Tested Benefits, FY1968-FY1998
($ in millions)
Total spending
Fiscal
year
Federal
dollars
State-local dollars
Total current
dollars
Constant 1998
dollarsa
1968
1973
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
11,406
26,876
39,461
49,954
55,113
63,964
70,172
80,043
87,936
88,977
93,830
99,151
105,064
107,775
114,835
125,061
134,730
151,514
177,953
208,273
223,595
246,374
258,457
263,550
269,756
277,330
4,710
10,054
14,753
16,990
18,892
20,151
21,304
24,633
29,045
31,706
33,982
36,191
38,230
40,811
43,364
46,580
51,587
61,064
73,943
88,130
88,736
102,396
108,212
107,219
110,216
114,399
16,116
36,930
54,214
66,944
74,005
84,115
91,476
104,676
116,981
120,683
127,812
135,342
143,294
148,586
158,199
171,641
186,317
212,578
251,896
296,403
312,331
348,770
366,669
370,769
379,972
391,729
75,546
135,684
164,385
191,926
199,215
210,455
205,544
207,231
209,935
204,011
209,337
212,496
217,245
221,157
227,174
236,685
245,112
265,405
301,724
344,585
352,697
383,854
392,253
385,319
385,910
391,729
Data Sources:
! 1968 and 1973 data are from:
Income Security for Americans:
Recommendations of the Public Welfare Study. Report of the
Subcommittee on Fiscal Policy of the Joint Economic Committee.
December 5, 1974. Table 4, p. 28 of Joint Economic Committee study,
CRS-7
!
!
!
!
!
!
!
a
(1968 federal total has been increased by $54 million to correct a
typographical error in that table, and the 1973 federal total has been
increased by $101 million to include Title X family planning, previously
omitted from this report series). Data sources for other years follow.
1975-1985 data are from previous editions of this report, as revised and
summarized in CRS Report 88-526, p. 8-9, but with these changes: (a)
state/local estimates for medical spending under General Assistance (GA)
have been changed to reflect revised estimates of the U.S. Department of
Health and Human Services; (b) for 1982 and 1983 estimates of state/local
spending for social services of the Title XX variety (previously unavailable)
have been added, and, for 1984 and 1985, increased; (c) $100 million has
been subtracted from federal 1984 social services spending to correct a
duplication (transfer of Low-Income Home Energy Assistance Program
funds), (d) amounts ranging from $101 million in 1975 to $162 million in
1980 have been added each year to account for federal spending for Title
X family planning, and (e) amounts representing the tax expenditure
component of the EITC have been subtracted from federal totals, leaving
only the refunded part of the credit.
1986-1987 data are from CRS Report 89-595, p. 2, revised by additions to
federal spending for Title X family planning and (1987) for health centers
for the homeless, subtractions for the tax expenditure component of the
EITC, and subtractions to reflect revised estimates for GA medical
spending (nonfederal).
1988-1989 data are from CRS Report 91-741, p. 2, revised to reflect
reduced estimates of GA medical spending and to include federal spending
for health centers for the homeless.
1990-1991 data are from CRS Report 93-832, p. 2, revised to reflect
increased estimates of GA medical spending and of state-local spending for
Title XX social services, and to include federal spending for health centers
for the homeless and for public housing health centers.
1992-1993 data are from CRS Report 96-159, p. 2, revised to reflect
increased estimates of state-local spending for Title XX social services and
to include federal spending for health centers for the homeless and for
public housing health centers.
1994-1996 data are from CRS Report 98-226, revised by addition of
federal spending for health centers for the homeless and for public housing
health centers.
1996-1998 data are from Table 1 (p. 2) of this report.
Current dollars have been translated into FY1998 constant dollars by use of the Consumer Price
Index for all Urban Consumers.
During 1968-1976, Congress liberalized some old welfare programs and
established new ones. Some of the major expansions follow. Effective in 1969,
Congress gave a work incentive bonus to all mothers who received AFDC checks; the
bonus, virtually repealed in late 1981, was the right to a welfare supplement even after
their earnings rose above the state standard of need. In 1969, minimum rents for
public housing were abolished (reinstituted, at a low level, in 1974). By 1970
amendment, the Food Stamp program was converted into a federal income guarantee
in participating counties. By 1972 amendment, basic educational opportunity grants
were adopted for all needy college students (extended to “middle-income” students
by 1978 law). In 1972, effective in 1974, a federal cash income guarantee (SSI) was
enacted for the aged, blind, and disabled, and Congress established the Special
CRS-8
Supplemental Food Program for Women, Infants, and Children (WIC). Effective in
1974, food stamps were extended to all counties, providing a national income
guarantee in the form of food stamps. In 1975, a rebatable tax credit (EITC) was
adopted for low-income workers with children.
In 1981, Congress moved to restrict eligibility for some programs and to lower
some benefits. For example, it imposed gross income eligibility limits for AFDC and
food stamps, reduced AFDC and food stamp benefits for families with earnings, raised
public housing rents, and reduced subsidies for school lunches. Effective in FY1983,
it temporarily reduced the food stamp guarantee. Thereafter, Congress restored food
stamp benefit rules for workers (1985), expanded Medicaid eligibility for some needy
persons not enrolled in cash welfare, sharply expanded the EITC (and gave it inflation
protection) (1986), and required all states to offer AFDC to needy two-parent families
in which the primary earner is unemployed or underemployed (1988). It also
established the Job Opportunities and Basic Skills (JOBS) program for AFDC
recipients and expanded federal matching funds for work and training and for related
child care. In 1993 (P.L. 103-66), Congress again expanded the EITC, with the goal
of ending poverty for a family of four with a parent who works full time at the
minimum wage (counting food stamps toward the antipoverty goal). At the same
time it established a small EITC for childless workers.
In 1996, effective July 1, 1997 at latest, Congress repealed AFDC, JOBS, and
Emergency Assistance, replacing them with a fixed annual block grant for Temporary
Assistance for Needy Families (TANF), through FY2002. It specified that state
TANF programs must condition eligibility on work, impose a lifetime limit (5 years
at most) on federally funded aid, and achieve prescribed work participation rates for
full funding. The 1996 law (P.L. 104-193) also ended eligibility for most welfare
benefits for non-citizens, added to the Food Stamp program a stringent work
requirement for childless persons aged 18-50, and sharply expanded federal funding
for child care, consolidating the funds in the Child Care and Development Block
Grant. In 1997, Congress added special welfare-to-work grants to TANF (2 years
only), moderated some of the rules affecting noncitizens (see later section on Alien
Eligibility for Federal Benefits), and established a new program of State-Children’s
Health Insurance (S-CHIP).
CRS-9
Chart 1. Federal and State/Local Expenditures for Income-Tested Benefits FY1975-FY1998,
in Constant 1998 Dollars
450,000
Millions of Constant Dollars
400,000
350,000
300,000
Total
250,000
200,000
150,000
100,000
50,000
State-Local
0
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
19
CRS-10
Spending Trends by Level of Government. Table 4 presents 1968-1998
federal welfare spending in constant 1998 dollars, by form of benefit; Table 5 gives
corresponding state-local data. Measured in constant 1998 dollars, federal spending
for income-tested benefits climbed from $53.5 billion in fiscal year 1968 to $277.3
billion in fiscal year 1998, an increase of 419%. As Table 4 shows, cash aid was the
leading form of federal welfare until 1980, when it was overtaken in value by medical
benefits. Two years later, in 1982, federal welfare spending declined for all forms of
aid except subsidized housing, in which case outlays reflected earlier commitments,
and education benefits. In 1983, federal spending declined further for medical
benefits. For the next 12 years, aggregate real federal welfare outlays climbed
steadily, from $155.7 billion in FY1984 to $276.5 billion in FY1995. However, in
FY1996, real federal welfare spending declined, but thereafter it turned upward, and
in FY1998 it set a new historic record of $277.3 billion.
Table 5 shows that state/local spending for income-tested benefits, measured in
FY1998 dollars, climbed from $22.1 billion in fiscal year 1968 to $114.4 billion in
FY1998, an increase of 418%. Cash aid was overtaken by medical benefits as the
dominant form of state/local welfare spending in 1976. Unlike federal welfare
spending, state-local spending rose steadily in all years since 1979 except for 1993
and 1996.
CRS-11
Table 4. Federal Spending for Income-Tested Benefits by Form of Benefit, FY1968-FY1998
(millions of constant FY1998 dollars)
Fiscal
year
Medical
benefits
Food
benefits
Housing
benefits
Education
benefits
Jobs/training
Services
Energy
aid
Totala
1968
$12,849
$23,612
$4,186
1973
24,466
31,505
14,164
1975
29,063
38,627
19,524
1976
31,379
42,778
22,153
1977
35,479
42,255
20,878
1978
36,444
40,149
21,289
1979
36,875
38,046
23,317
1980
38,405
37,571
25,913
1981
39,935
37,615
28,156
1982
38,948
36,472
26,496
1983
38,611
36,690
29,639
1984
39,007
37,341
29,385
1985
42,268
37,123
29,354
1986
44,316
39,187
28,491
1987
50,467
39,431
28,566
1988
53,258
41,802
27,877
1989
55,790
43,628
27,410
1990
62,708
45,502
29,803
1991
74,805
50,634
33,545
1992
91,470
56,635
38,142
1993
96,044
60,245
39,266
1994
103,112
69,774
39,739
1995
108,489
72,662
39,365
1996
108,003
72,758
38,622
1997
109,471
72,971
35,927
1998
113,779
73,872
33,451
Source: Data sources are the same as for Table 3.
a
Rows may not add to total shown because of rounding.
$3,670
12,338
13,141
15,224
16,259
18,367
19,007
19,017
19,488
19,919
20,439
20,152
21,396
19,744
18,971
20,272
20,950
21,909
22,712
25,486
27,051
26,574
26,689
26,497
26,853
26,897
$4,031
6,691
6,610
10,591
9,360
10,176
10,810
9,681
8,591
13,160
12,158
12,578
14,427
14,966
14,027
15,371
16,424
17,181
17,803
15,813
16,163
16,109
16,193
16,028
16,767
16,989
$3,324
3,391
6,516
13,205
14,598
24,269
20,820
17,075
13,488
6,743
7,382
8,442
5,905
5,397
5,431
5,168
5,019
4,963
5,257
5,834
5,388
5,350
4,949
4,199
3,855
3,785
$1,795
6,191
6,170
7,807
8,716
8,659
8,208
7,394
6,933
5,246
5,411
5,399
5,384
5,046
5,180
6,190
5,882
5,099
6,236
6,790
6,604
8,389
6,431
6,560
6,764
7,300
$0
0
0
80
813
683
591
3,407
3,605
3,428
3,351
3,369
3,428
3,267
2,830
2,515
2,143
2,003
2,163
1,959
1,732
2,110
1,713
1,225
1,363
1,257
$53,467
98,745
119,652
143,216
148,359
160,038
157,674
158,464
157,811
150,413
153,680
155,674
159,285
160,414
164,903
172,453
177,246
189,166
213,154
242,129
252,492
271,158
276,491
273,893
273,971
277,330
Cash aid
CRS-12
Table 5. State-Local Spending for Income-Tested Benefits by Form of Benefit, FY1968-FY1998
(millions of constant FY1998 dollars)
Fiscal
year
Medical
benefits
Cash aid
Food
benefits
Housing
benefits
Education
benefits
Jobs/training
Services
Energy
aid
Totala
1968
1973
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
$9,661
15,303
20,046
22,374
23,928
24,422
25,022
26,132
28,050
29,678
30,928
32,235
32,687
34,335
35,336
37,445
40,801
45,689
56,847
66,449
65,502
74,542
78,327
76,920
79,537
82,610
$11,672
19,462
20,470
21,990
22,006
21,022
19,266
19,294
19,735
18,886
19,343
19,448
19,936
21,019
21,282
21,226
21,692
22,236
23,179
24,538
24,223
25,228
25,327
23,325
21,566
20,690
$0
0
1,695
1,815
2,189
2,184
888
905
1,041
1,215
1,282
1,492
1,560
1,642
1,676
1,571
1,529
1,542
1,572
1,678
1,768
1,948
1,958
1,995
2,005
2,060
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,674
1,502
1,777
2,487
2,555
2,494
2,614
$0
0
434
447
498
593
564
566
524
455
495
474
688
737
734
750
717
785
655
714
865
994
1,022
992
1,042
1,137
$202
206
118
112
153
158
175
160
151
127
129
122
123
109
102
99
128
333
526
553
635
720
868
669
181
71
$544
1,969
1,971
1,972
2,081
2,039
1,955
1,709
2,624
3,212
3,439
2,983
2,918
2,828
2,843
2,896
2,763
5,498
5,656
5,748
5,629
7,403
5,688
4,894
5,049
5,153
$0
0
0
0
0
0
0
0
0
25
41
68
47
74
299
244
237
155
135
102
80
85
87
76
65
64
$22,079
36,939
44,733
48,710
50,856
50,418
47,869
48,767
52,124
53,598
55,657
56,822
57,960
60,744
62,271
64,232
67,866
76,239
88,570
102,456
100,204
112,696
115,762
111,426
111,938
114,399
Source: Data sources are the same as for Table 3.
Rows may not add to total shown because of rounding.
a
CRS-13
Overall Spending Trends, by Form of Benefit. The dramatic change over the
last three decades in the composition of spending for income-tested benefits is shown
in Chart 2 and in Table 6. Outlays for medical benefits grew to almost equal those
for cash aid by FY1978, then rapidly overtook them. By FY1992, medical benefit
spending was almost double that for cash aid.
Table 6. Outlay Trends by Form of Benefit, FY1968-FY1998
(billions of constant 1998 dollars)
FY1968
FY1978 FY1988 FY1992
FY1994
FY1996
FY1998
Medical aid
$22.5
$60.9
$90.7
$157.9
$177.7
$184.9
$196.4
Cash
35.3
61.2
63.0
81.2
95.0
96.1
94.5
Food benefits
4.2
23.5
29.4
39.8
41.7
40.6
35.5
Housing
3.7
18.4
20.3
28.2
28.4
29.1
29.5
Education
4.0
10.8
16.1
16.5
17.1
17.0
18.1
Jobs/training
3.5
24.4
5.3
6.4
6.1
4.9
3.9
Services
2.3
10.7
9.1
12.5
15.8
11.5
12.5
Energy aid
—
.7
2.8
2.1
2.2
1.3
1.3
$75.5
$210.5
$236.7
$344.6
$383.9
$385.3
$391.7
Totalb
a
Data sources are the same as for Table 3.
Some columns do not add to total shown because of rounding.
b
CRS-14
Chart 2. Composition of Income-Tested Benefits
FISCAL YEAR 1968
FISCAL YEAR 1998
other
other
education
education
medical
housing
food
housing
food
medical
cash
cash
CRS-15
Share of Gross Domestic Product. As a share of GDP, total welfare outlays
more than doubled from 1.77% in FY1968 to a peak of 3.76% in 1980. Thereafter,
the share sank to 3.36% in 1986, but in the 1990s it climbed to new record highs,
exceeding 4% in 1991-1993 and 5% in 1994 and 1995. However, in 1996-1998, it
slipped below 5% (and in 1998 was 4.6%).
Share of Federal Budget. The share of the federal budget used for benefit
programs for low-income persons more than doubled from 1968 to 1976 and in 19781979 reached 13.9%. However, it began dropping in 1980 and fell to 10.9% in 1986
before again turning upward. In the next 8 years it climbed steadily, setting new
record highs in 1992 (15.1%), 1993 (15.9%), 1994 (16.9%), and 1995 (17.1%).
However, in 1996 it dipped lower and in 1998 was 16.8%.
Alien Eligibility for Federal Benefits
The 1996 welfare reform law (P.L. 104-193) sharply restricted welfare eligibility
for noncitizens. Under that law, as amended by P.L. 105-33 and P.L. 105-185, the
eligibility of aliens for major federal benefit programs depends on their immigration
status and whether they arrived before or after August 22, 1996, when the 1996 law
was signed. Refugees remain eligible for Supplemental Security Income (SSI),
Medicaid, and food stamps for 7 years after arrival, and for other restricted programs
for 5 years. Most legal immigrants are barred from food stamps and SSI until they
naturalize or meet a 10-year work requirement. Immigrants who received SSI (and
SSI-related Medicaid) on August 22, 1996, continue to be eligible, as do those here
then who subsequently become disabled. Immigrants here by August 22, 1996 are
eligible for food stamps if they were over 65, until they turn 18, and/or if they
subsequently become disabled. Immigrants entering after August 22, 1996 are barred
from TANF and Medicaid for 5 years, after which their coverage becomes a state
option. Also after the 5-year bar, the sponsor’s income is deemed to be available to
new immigrants in determining their financial eligibility for designated federal meanstested programs until they naturalize or meet the work requirement. (See CRS
Report 96-617, Alien Eligibility for Benefits for Public Assistance.)
CRS-16
Cash and Noncash Aid Received by Poor Families With Children
The Census Bureau reports that 7.2 million families (including 5.6 million with
children) in 1998 had total pre-tax money income — after counting any cash from the
welfare programs of Temporary Assistance for Needy Families (TANF),
Supplemental Security Income (SSI), and General Assistance (GA) — that was below
their poverty threshold. The Bureau found that the money income poverty rate
among related children in families was 18.3%, the lowest since 1980 (when it was
17.9%). It reported that if the Earned Income Tax Credit (EITC), food stamps, free
and reduced price school lunches, rent subsidies, and Medicaid coverage7 also were
counted as income, and if federal and state income and payroll taxes were subtracted
from income, the poverty rate for related children would drop to 12.9% (and the
number classified as “poor” would fall from 12.8 million to 8.7 million).8
Overall, 34.5 million persons were classified as poor on the basis of 1998 pre-tax
money income. Of these persons, 69.2% were in households that received meanstested aid from at least one of eight programs (TANF, SSI, GA, school lunch, food
stamps, Medicaid, subsidized housing, low-income home energy assistance). By race
and ethnicity, the following percentages of poor persons were in households that
received pre-tax aid from one or more of the eight programs: whites, 64%, compared
with 69% in 1996; blacks, 82.5%, compared with 86% in 1996; persons of Hispanic
origin, 78%, compared with 84% in 1996. (Although the share of pre-tax poor
families aided by these programs declined, the share of families with children that
received income supplements from the EITC increased, as shown in the next
paragraph.)
Chart 3 depicts income-tested aid provided to families with children who were
poor before receiving any cash aid from TANF, GA, or the EITC. In 1998, these
families totaled 6.1 million (compared with 6.7 million in 1996): 3.8 million with a
female householder and 2.3 million with a male householder (chiefly two-parent
families). These numbers, based on CRS estimates, include unrelated subfamilies (the
Census Bureau excludes these subfamilies from their “family” counts). As the chart
shows, all but 9.1% of the female-headed families and 9% of the male-present families
whose pre-tax, pre-welfare money income fell short of the poverty threshold received
means-tested aid. For male-present families, the EITC, which goes only to persons
with earnings, was the dominant form of aid. In all, 77.7% of male-present families
who were poor before transfers received the EITC (compared with 76% in 1996); for
32% it was the only aid. Among female-headed families who were poor before
transfers, 55.9% received the EITC (compared with 48% in 1996); for 14.8% it was
the only aid. A combination of TANF or GA cash, food stamps, and Medicaid went
to 10.1% of female-headed families and to 3.1% of male-present families.
7
For this purpose, the income value of Medicaid benefits was defined as their “fungible
value”: the extent to which they free up resources that could have been spent on medical
value.
8
U.S. Bureau of the Census. Poverty in the United States: 1998. Current Population
Reports, Series P-60, no. 207, September 1999.
CRS-17
Chart 3.
Cash and Noncash* Welfare Benefits Received
by Poor** Families with Children, 1998
Female-Headed Families
Male-Present Families
EITC and combinations of
cash and noncash benefits
-TANF or GA, Food Stamps, and Medicaid... and Housing Assistance
9.4%
0.7
2.7%
%
EITC a
nd
combin
10.1%
ations
of cash
an
benefit d noncash
s--18.9%
Other combos.
cash and
noncash
8.9%
1.2% 3.1%
9.0%
EITC and
noncash
only--22.2%
EITC
only
14.8%
Non
onl cash
y--1
3.0%
9.1%
h
as %
nc -8.1
o
N lyon
No
means-tested
benefits
* Cash welfare benefits shown are:
Temporary Assistance to Needy Families (TANF)
and General Assistance (GA).
Noncash benefits shown are: Food Stamps,
Medicaid and Housing Assistance.
**Poor before receiving cash welfare.
Chart based on CRS analysis of March 1999 Current Population Survey data.
EITC and
noncash
only--36.7%
EITC only
32.1%
Receives Earned Income Tax Credit
CRS-18
Income Tests of the Benefit Programs
More than 90% of the programs in this report have an explicit test of income.
The others base eligibility on area of residence, enrollment in another welfare
program, or other factors that presume need.
The explicit income tests are of five kinds:
Income ceiling related to one of the federal government’s official
poverty measures (federal poverty income guidelines or Census
Bureau poverty thresholds).Income limit related to state or area
median income.
! Income limit related to the Bureau of Labor Statistics’ (BLS) lower
living standard income levels.Income below absolute dollar standard.
! Income level deemed to indicate “need.”
!
Table 7 classifies the programs9 in this report by type of income test.
It shows that five federal cash benefit programs use an absolute federal dollar
ceiling. The other cash programs, including TANF, base eligibility on state decisions
about income need. Medicaid, the largest welfare program of all, uses three kinds of
income tests. Some persons qualify because the state finds them needy, some because
their income is below limits for SSI (or for the repealed program of AFDC), and
some qualify on the basis of the poverty guidelines. Most food benefit programs tie
eligibility to the federal poverty income guidelines; some also give automatic eligibility
to persons in another benefit program. Most housing programs base eligibility on area
median income. Job programs, on the other hand, tend to use official poverty
measures or Department of Labor income standards, whichever are higher. For most
education benefit programs, a special need analysis system (federal needs analysis
methodology) is used.
The benefit programs use income tests to decide eligibility and, in some cases,
to decide the size of benefit. Some set one income limit for free service, another for
partially subsidized service. Some programs admit a limited percentage of recipients
with income above their customary limits. An example is Head Start.
9
The total number of classifications in Table 7 exceeds 80 because many programs have
alternative income tests.
CRS-19
Table 7. Income Eligibility Tests Used by Benefit Programs
Limit related to:
Program*
Official
poverty
measure
Lower
living
standard
income
level
State/
area
median
income
Dollar
amount
Income
deemed
needy
Area of
residence
Enrollment
in or
eligibility
for another
program Other
MEDICAL BENEFITS
1. Medicaid
Xa
Xb
2. Veterans’ medical care (no
service disability)
Xd
X
3. General assistance
(medical)
Xb
4. Indian health services
X
5. Maternal and child health
services
Xe
6. Consolidated health
centers
Xf
7. Title X family planning
Xf
8. S-CHIP
X
Xg
Xh
9. Medical aid for refugees,
Cuban/Haitian entrants
Xb
CASH AID
10. SSI
Xi
11. EITC
X
12. TANF/AFDC
Xc
Xj
Xb
CRS-20
Limit related to:
Program*
Official
poverty
measure
Lower
living
standard
income
level
State/
area
median
income
Dollar
amount
Income
deemed
needy
Xb
13. Foster care
14. Veterans’ pensions
Area of
residence
Enrollment
in or
eligibility
for another
program Other
Xc
X
Xb
15. General assistance
Xk
16. Adoption assistance
Xb
17. General assistance to
Indians
Xb
18. Cash aid – refugees,
Cuban/Haitian entrants
Xb
19. DIC (vets’ parents)
Xc
X
20. Emergency assistancel
Xb
FOOD BENEFITS
21. Food stamps
X
Xm
22. School lunch (free/
reduced price)
X
Xn
23. WIC
X
Xo
24. Child and adult care food
program
X
25. School breakfast
(free/reduced price)
X
26. Nutrition program for the
elderly
Xn
Xp
CRS-21
Limit related to:
Program*
Official
poverty
measure
Lower
living
standard
income
level
State/
area
median
income
Income
deemed
needy
X
29. Commodity supplemental
food
X
30. Food distribution for
Indians
31. Special milk (free)
Area of
residence
Xb
27. The emergency food
assistance program
28. Summer food service
Dollar
amount
Enrollment
in or
eligibility
for another
program Other
X
X
X
HOUSING BENEFITS
32. Section 8 lower-income
housing assistance
X
33. HOME
X
34. Public housing
X
35. Rural housing loans
X
36. Section 236 interest
reduction payments
X
37. Rural rental assistance
(Section 521)
X
38. Rural rental housing
loans (Section 515)
X
39. HOPE
X
X
X
CRS-22
Limit related to:
Program*
Official
poverty
measure
Lower
living
standard
income
level
State/
area
median
income
40. Rural housing repair
loans and grants
X
41. Section 101 rent
supplements
X
42. Section 235
homeownership
X
43. Rural self-help technical
assistance grants and site
loans
X
Dollar
amount
Income
deemed
needy
X
44. Farm labor housing loans
and grants
X
45. Indian housing
improvement grants
X
46. Rural housing
preservation grants
X
EDUCATION
Xq
47. Pell grants
48. Head Start
X
49. Stafford and
Stafford/Ford loans
Xq
50. Federal work-study
program
Xq
Area of
residence
Enrollment
in or
eligibility
for another
program Other
CRS-23
Limit related to:
Program*
Official
poverty
measure
51. Supplemental educational
opportunity grants
52. Federal TRIO programs
Lower
living
standard
income
level
State/
area
median
income
Dollar
amount
Income
deemed
needy
Area of
residence
Enrollment
in or
eligibility
for another
program Other
Xq
X
53. Chapter 1 migrant
education
Xr
Xq
54. Perkins loans
55. Health professions
student loans and scholarships
Xs
Xt
56. State student incentive
grants
Xb
57. Fellowships for graduate
and professional study
Xq
58. Migrant high school
equivalency
Xu
59. College assistance
migrant program
Xu
60. Ellender fellowships
Xv
CRS-24
Limit related to:
Program*
Official
poverty
measure
Lower
living
standard
income
level
State/
area
median
income
Dollar
amount
Income
deemed
needy
Area of
residence
Enrollment
in or
eligibility
for another
program Other
SERVICES
61. Social services (Title
XX)
Xw
Xb
62. Child care and
development block grant
Xx
Xy
Xz
63. Homeless assistance
64. Community services
block grant
X
65. Legal services
X
66. Social services for
refugees and Cuban/Haitian
entrants
Xb
Xz
67. Emergency food and
shelter
68. Child care for AFDC
recipients and ex-recipientsl
Xb
69. At-risk child carel
Xb
X
JOBS AND TRAINING
71. Job Corps
Xaa
X
X
72. Adult training
Xaa
X
X
CRS-25
Limit related to:
Official
poverty
measure
Lower
living
standard
income
level
73. Summer youth
employment
Xaa
X
74. Senior community
service employment
X
75. Youth training
Xaa
76. Foster grandparents
X
77. Senior companions
X
Program*
State/
area
median
income
Dollar
amount
Income
deemed
needy
Area of
residence
Enrollment
in or
eligibility
for another
program Other
X
X
X
X
78. Native employment
works
Xb
X
ENERGY AID
79. Low-income home energy
aid
Xbb
80. Weatherization
assistance
X
X
X
X
X
*Short titles and abbreviations are used in this table. See table of contents for full titles.
a
States must extend Medicaid to certain persons whose income is below the federal poverty income guideline (or a multiple of it) but who do not
receive cash aid. These persons are pregnant women, children born since September 30, 1983, the aged, the blind, and the disabled.
b
Need is decided by state, locality, Indian tribe (or Alaskan Native village).
c
Eligible for Medicaid, foster care, and adoption assistance are persons who do not qualify for TANF but who would be income-eligible for AFDC
under the terms of July 16, 1996 (with some modifications allowed) if that program had not been replaced by TANF. Also eligible for
Medicaid in most states are persons eligible for SSI.
d
Veterans receiving veterans’ pensions or eligible for Medicaid are automatically eligible for free VA medical care.
e
The stated purpose of the Maternal and Child Health (MCH) Services Block Grant law is to enable states to assure access to quality MCH services
to mothers and children, particularly those with low income (or limited availability of health services). The law defines low income in terms
of the federal poverty income guidelines. This block grant, which took effect in FY1981, includes funding for crippled children’s services.
f
The law limits free care to those below the federal poverty income guidelines.
CRS-26
g
All residents of the area served are eligible, but fees must be charged the nonpoor.
If a state’s Medicaid limit for children is at or above 200% of the poverty guideline, it may give S-CHIP to children whose family income is within
150% of the Medicaid limit (thus, up to 50% above the Medicaid limit).
i
For basic federal SSI payment.
j
States decide need for an optional state supplement to SSI.
k
For a blind or disabled child eligible for adoption assistance because of eligibility for SSI.
l
This program was ended by P.L. 104-193.
m
Households composed wholly of recipients of SSI or GA or of recipients of TANF cash or services automatically meet food stamp assets and
income tests but their benefits must be calculated by food stamp rules.
n
Food stamp eligibility is accepted as documentation of eligibility for the free school lunch and free school breakfast programs.
o
States may give automatic eligibility to public assistance recipients.
p
The law requires preference for those with greatest economic or social need.
q
Need is decided by a system known as the federal needs analysis methodology, which is set forth in Part F of Title IV of the Higher Education
Act (HEA) as amended.
r
There is no income test. Migratory children are presumed to be needy.
s
For forgiveness of loans made to needy students who fail to complete studies.
t
Need for loans is decided by the educational institution, by use of a needs analysis system approved by the Secretary of Education “in combination
with other information” about the student’s finances. For all health professional scholarships and for loans to students of medicine and
osteopathy, federal regulations define the required “exceptional financial need.”
u
Regulations require the educational institution to determine that migratory students need the financial assistance provided.
v
Law makes eligible secondary students who are “economically disadvantaged,” but does not define the term. There are no regulations.
w
Applies to families aided with TANF dollars tranferred to Title XX (their income cannot exceed 200% of the federal poverty guidelines). Before
P.L. 97-35, federal law set an outer eligibility limit related to state median income and required one-half of federal funds to be used for
recipients of (or persons eligible for) cash welfare or Medicaid.
x
Income ceiling is 85% of state median for family of same size.
y
At least 70% of entitlement CCDBG funds must be used for families receiving TANF, trying to leave welfare through work, or at risk of becoming
eligible for TANF.
z
Need is decided by agencies administering the benefits.
aa
The federal poverty income guideline is used if higher than 70% of the lower living standard income level of the Department of Labor.
bb
States have the option of setting limits below outer federal ceilings (but cannot set a ceiling below 110% of the federal poverty income guideline).
h
CRS-27
Poverty Thresholds and Other Measures of Need
On the next pages are found:
Estimated weighted average poverty thresholds in 1998, issued by the Census Bureau
in January 1999.10
!
Federal poverty income guidelines for 1999, issued by the
Department of Health and Human Services (HHS) in March 1999.11
!
Income eligibility levels for free and reduced price meals for the
period July 1, 1999-June 30, 2000 (130% and 185%, respectively, of
1999 federal poverty income guidelines), issued by the Department
of Agriculture in March 1999.
!
Lower living standard income levels for families of four persons,
issued by the Employment and Training Administration of the
Department of Labor in May 1999.
10
The Census Bureau poverty thresholds generally are used for statistical purposes. Since
1969, OMB has directed federal departments and agencies to use the Census Bureau’s
statistics on poverty for statistical purposes. The Census Bureau’s poverty threshold uses a
definition of poverty developed by the Social Security Administration in 1964 and revised on
the basis of recommendations of federal interagency committees in 1969 and 1980.
11
The federal poverty income guidelines are used for administrative purposes. They are a
simplified version of the statistical thresholds of the Census Bureau. The current procedure
for computing them was developed by the Office of Economic Opportunity in 1973, continued
by the Community Services Administration (CSA), and, since the 1981 enactment of P.L. 9735, which abolished CSA, has been used by the Secretary of HHS. That law requires the
HHS Secretary to revise at least annually “the official poverty line (as defined by the Office
of Management and Budget).”
CRS-28
Table 8. Bureau of the Census Poverty Thresholds for 1998
Preliminary estimated
threshold: 1998a
1 person (unrelated individual) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,310
Under 65 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,480
65 years and over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,818
2 persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,636
Householder under 65 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,973
Householder 65 years and over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,863
3 persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,001
4 persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,655
5 persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,682
6 persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,227
7 persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,188
8 persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,023
9 persons or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,073
Source: Census Bureau press release, January 19, 1999.
a
Factor used to update 1997 thresholds: 1.015576 (representing the percent change in the average
annual Consumer Price Index between 1997 and 1998).
CRS-29
Table 9. 1999 Federal Poverty Income Guidelines
Size of family unit
48 Contiguous
states and D.C.
Alaska
Hawaii
1
$ 8,240
$10,320
$ 9,490
2
11,060
13,840
12,730
3
13,880
17,360
15,970
4
16,700
20,880
19,210
5
19,520
24,400
22,450
6
22,340
27,920
25,690
7
25,160
31,440
28,930
8
27,980
34,960
32,170
For each additional
person, add
2,820
3,520
3,240
Source: Federal Register, v. 64, no. 52, March 18 ,1999. p. 13428-13430.
CRS-30
Table 10. Eligibility Levels for Free and Reduced Price Meals for the
Period of July 1, 1999-June 30, 2000
Maximum annual income levels
Family size
Free meals: 130%
federal poverty income
guidelines
Reduced price meals:
185% federal poverty
income guidelines
48 Contiguous United States, District of Columbia, Guam and Territories
1
$10,712
$15,244
2
14,378
20,461
3
18,044
25,678
4
21,710
30,895
5
25,376
36,112
6
29,042
41,329
7
32,708
46,546
8
36,374
51,763
+3,666
+5,217
Add for each additional member
Alaska
1
$13,416
$19,092
2
17,992
25,604
3
22,568
32,116
4
27,144
38,628
5
31,720
45,140
6
36,296
51,652
7
40,872
58,164
8
45,448
64,676
+4,576
+6,512
Add for each additional member
Hawaii
1
$12,337
$17,557
2
16,549
23,551
3
20,761
29,545
4
24,973
35,539
5
29,185
41,533
6
33,397
47,527
7
37,609
53,521
8
41,821
59,515
+4,212
+5,994
Add for each additional member
Source: Federal Register, v. 64, no. 63, April 2, 1999. p. 15958.
CRS-31
Table 11. Lower Living Standard Income Level (LLSIL) for a Family of
Foura – Effective May 14, 1999
(For use in programs under the Job Training Partnership Act, the Workforce
Investment Act, and the Work Opportunity Tax Credit)b
1999 adjusted LLSILc
70% of LLSILd
Metropolitan
$28,670
$20,070
Non-Metropolitan
28,320
19,830
Metropolitan
26,580
18,610
Non-Metropolitan
25,150
17,610
Metropolitan
25,140
17,600
Non-Metropolitan
24,050
16,830
Metropolitan
28,270
19,790
Non-Metropolitan
27,770
19,440
Metropolitan
35,820
25,080
Non-Metropolitan
34,860
24,410
Metropolitan
37,290
26,110
Non-Metropolitan
37,220
26,060
Anchorage, AK
35,820
25,080
Atlanta, GA
25,250
17,680
Boston-Brockton-Nashua,
30,420
21,300
Chicago-Gary-Kenosha, IL-IN-WI
27,980
19,590
Cincinnati-Hamilton, OH-KY-IN
26,620
18,640
Cleveland-Akron, OH
27,730
19,420
Dallas-Ft Worth, TX
23,920
16,750
Denver-Boulder-Greeley, CO
27,910
19,540
Detroit-Ann Arbor-Flint, MI
25,820
18,080
Honolulu, HI
37,290
26,110
Houston-Galveston-Brazoria, TX
23,340
16,340
Kansas City, MO-KS
25,800
18,070
Los Angeles-Riverside-Orange County, CA
28,630
20,050
Milwaukee-Racine, WI
26,890
18,830
Minneapolis-St Paul, MN-WI
26,130
18,300
New York-Northern New Jersey-Long
29,950
20,970
Philadelphia-Wilmington-Atlantic City,
27,890
19,530
Area
Northeast
Midwest
South
West
Alaska
Hawaii/Guam
Metropolitan Statistical Area (MSA)
CRS-32
1999 adjusted LLSILc
70% of LLSILd
Pittsburgh, PA
26,850
18,810
St. Louis, MO-IL
25,490
17,850
San Diego, CA
29,240
20,470
San Francisco-Oakland-San Jose, CA
29,690
20,790
Seattle-Tacoma-Bremerton, WA
31,010
21,710
Washington-Baltimore, DC-MD-VA-WA
30,320
21,230
Area
Source: Federal Register, v. 64, no. 93, May 14, 1999. p. 26454
a
For LLSILs for other family sizes, see Federal Register entry noted above.
On the basis of LLSIL tables, the Governor of each state is to provide “appropriate” figures to
service delivery areas (SDAs), workforce development areas, state employment security
agencies, and employers to use in determining eligibility for JTPA, WIA, and WOTC.
Regulations say that figures may be determined by using information on Metropolitan
Statistical Areas (MSAs) and metropolitan and nonmetropolitan areas within a state, or
that they may require future calculation. An example is given: “. . . the State of New Jersey
may have four or more figures: metropolitan, nonmetropolitan, for portions of the state in
the New York City MSA and for those in the Philadelphia MSA. If an SDA under JTPA
or a Workforce Development Area under WIA includes areas that would be covered by
more than one figure, the Governor may determine which is to be used.”
c
To assess whether employment will lead to “self-sufficiency,” WIA sets 100% of the LLSIL as
the minimum pay needed.
d
JTPA makes eligible as “economically disadvantaged” persons with income below 70% of the
LLSIL. WIA provides that the terms “low-income” person and “disadvantaged adult” may
be defined as a member of a family that received total family income that, in relation to
family size, does not exceed 70% of the LLSIL. Further, the Internal Revenue Code
provides that the term “economically disadvantaged” may be defined as 70% of the LLSIL
for purposes of the WOTC.
b
CRS-33
Catalog of Programs Offering Cash and Noncash
Benefits to Persons of Limited Income
Medical Aid
CRS-34
1. Medicaid1
Note: Effective on July 1, 1997 (earlier in most states), P. L. 104-193 ended Aid
to Families with Dependent Children (AFDC), a cash assistance program under which
recipients automatically were certified eligible for Medicaid. The replacement block
grant program of Temporary Assistance for Needy Families (TANF) does not entitle
all TANF recipients to Medicaid coverage. However, those who meet the income,
resource, and categorical eligibility criteria of the former AFDC program, as in effect
in their state on July 16, 1996, are entitled to Medicaid. The description below
summarizes Medicaid as it operated after AFDC was replaced by TANF.
Funding Formula
The federal government shares in the cost of Medicaid services by means of a
variable matching formula. The formula is inversely related to a state’s per capita
income and is adjusted annually. For FY1998 the federal matching rate for services
averaged about 57% for the Nation as a whole. The federal share of administrative
costs generally is 50% but as high as 100% for certain items. Federal funding in
FY1998 totaled $100 billion.
Federal Medical Assistance Percentage (FMAP)
The federal share of a state’s medical vendor payments is called the federal
medical assistance percentage (FMAP). The FMAP is higher for states with lower per
capita incomes and lower for states with higher per capita incomes. If a state’s per
capita income is equal to the national average per capita income, its FMAP would be
55%. The law establishes a minimum FMAP of 50% and a maximum of 83%2
(though the highest rate in FY1999 was 76.78% for Mississippi). Federal matching
for the territories is set at 50%, but a dollar ceiling also applies. The statutory
formula for determining the FMAP follows:
FMAP = 100% - state share (with a minimum of 50%
and a maximum of 83%)
State share = (state per capita income)2 x 45%
(national per capita income)2
1
Regulations governing Medicaid are found in 42 C.F.R. Parts 430-456 (1998). This
program is no. 93.778 in the Catalog of Federal Domestic Assistance.
2
In FY1998, federal funds paid 50% of medical vendor payments in the 10 jurisdictions with
the highest per capita income (Connecticut, Delaware, Hawaii, Illinois, Maryland,
Massachusetts, Nevada, New Hampshire, New Jersey, and New York) and more than 70%
in the eleven states with the lowest per capita income (Arkansas, Kentucky, Louisiana,
Mississippi, Montana, New Mexico, North Dakota, Oklahoma, South Carolina, Utah, and
West Virginia). Effective in FY1998, a special provision of P.L 105-33 raised the federal
share of Medicaid costs in the District of Columbia from 50% to 70%.
CRS-35
The percentages are based on the average per capita income of each state and
the United States for the three most recent calendar years for which satisfactory data
are available from the Department of Commerce.
The law provides one exception to the FMAP for benefits. Family planning
services (instruction in contraceptive methods and family planning supplies) are
federally matched at a 90% rate.
Eligibility Requirements
Medicaid is a means-tested entitlement program. Applicants’ income and
resources must be within program financial standards.3 These standards vary among
states, and different standards apply to different population groups within a state.
With some exceptions, Medicaid is available only to persons with very low income.
However, Medicaid does not cover everyone who is poor. Only 45% of persons in
poverty received Medicaid benefits at any time during 1995. There are two basic
reasons for this. First, state income limits tied to former AFDC cash assistance
criteria, and which continue to be applicable for Medicaid eligibility determination for
some families with children, are well below the poverty level. Second, Medicaid
eligibility is subject to categorical restrictions. That is, it is available only to lowincome persons who are aged, blind, disabled, members of families with dependent
children, and certain other pregnant women and children.
The Medicaid statute defines more than 50 distinct population groups as
potentially eligible, including those for which coverage is mandatory and those that
states may elect to cover. The various eligibility groups have traditionally been
divided into two basic classes, the “categorically needy” and the “medically needy.”
The two terms once distinguished between welfare-related beneficiaries and those
qualifying only under special Medicaid rules. However, nonwelfare groups have been
added to the “categorically needy” list over the years. The scope of covered services
that states must provide to the categorically needy is much broader than the minimum
scope of services for the medically needy (see the section on benefits).
Most of the eligible categories fall into seven basic groups:
!
3
Low-income families with children meeting the financial and
categorical criteria under the former AFDC program, and lowincome aged, blind, or disabled persons meeting the eligibility rules
for receipt of Supplemental Security Income or SSI. Families
meeting the eligibility requirements of state AFDC programs on July
16, 1996 are eligible for Medicaid, even if they do not qualify for
TANF. States may modify their rules governing income and
resource standards for AFDC-related groups. In almost all states,
SSI recipients receive Medicaid automatically. In FY1997, 48% of
Medicaid beneficiaries also received cash assistance.
“Resources” may include bank accounts and similar liquid assets, as well as real estate,
automobiles, and other personal property whose value exceeds specified limits.
CRS-36
!
Low-income pregnant women and children who do not meet
previous AFDC eligibility rules (as of July 16, 1996), either because
their income is too high or because they fail to meet the program’s
categorical restrictions. Coverage of some children in this category
(the “Ribicoff”4 children) was made optional when Medicaid was
enacted in 1965, but in the 1980s, Congress began requiring
coverage of non-AFDC children of certain ages with family income
below specified income levels.
!
The medically needy, persons who do not meet the financial
standards for cash assistance programs but meet the categorical
standards and have income and resources within specified medically
needy limits established by the states. Persons whose incomes or
resources are above those standards may also qualify by “spending
down,” incurring medical bills that reduce their income and/or
resources to the specified levels. Coverage of the medically needy is
optional; as of August 1996, 35 states and other jurisdictions covered
at least some groups of the medically needy.5
!
Persons requiring institutional care. Special eligibility rules apply
to persons receiving care in nursing facilities (NFs) or intermediate
care facilities for the mentally retarded (ICFs/MR) or who are
participating in alternative community care programs for the aged
and disabled. Many of these persons may have incomes well above
the poverty level but qualify for Medicaid because of the very high
cost of their care.
!
Low-income Medicare beneficiaries. Medicaid pays required
Medicare premiums, deductibles, and coinsurance on behalf of lowincome aged and disabled Medicare beneficiaries. (Coverage is
restricted to Medicare cost-sharing unless the beneficiary also
qualifies for Medicaid in some other way, or states choose to extend
full Medicaid benefits to certain individuals.)
!
Low-income persons losing employer coverage and entitled to
purchase continuation coverage through the employer’s group health
plan under the provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA, P.L. 99-272). At the state’s
option, Medicaid may pay the premiums for continued private
coverage on behalf of certain individuals.
!
Aliens. Currently, Medicaid eligibility for legal immigrants is
determined in part by when they arrived in the U.S. (relative to
August 22, 1996). Special rules also apply to refugees, asylees,
4
All children below age 21 who would be eligible for AFDC (as of July 16, 1996) if they met
that program’s definition of “dependent child.” This group is named after former Senator
Abraham Ribicoff, sponsor of legislation authorizing this coverage.
5
National Governor’s Association, 1996.
CRS-37
lawful permanent aliens, and individuals (and their families) who have
served in the military. Qualified aliens and nonqualified aliens who
otherwise meet Medicaid categorical and financial eligibility rules
may receive emergency services only.
Families, Pregnant Women, and Children
Medicaid-eligible families, pregnant women, and children fall into two basic
groups: those meeting AFDC standards as of July 16, 1996, and those qualifying
under a series of targeted Medicaid expansions that began in the 1980s.
AFDC-Related Groups. Medicaid eligibility for AFDC-related groups was
affected significantly by both the Personal Responsibility and Work Opportunities
Reconciliation Act of 1996 (PRWORA, P.L. 104-193), which replaced the AFDC
cash assistance program with the Temporary Assistance for Needy Families (TANF)
block grant program, and the Balanced Budget Act of 1997 (BBA 97, P.L. 105-33).
For AFDC-related families, the net effect of these two laws is: (1) for new eligibles,
states must use AFDC income and resource standards in effect on July 16, 1996, and
(2) families meeting AFDC eligibility criteria prior to PRWORA remain eligible for
Medicaid. States may modify their rules governing income and resource standards for
AFDC-related groups. Such modifications can be made by raising income/resource
standards up to the percentage increase in the Consumer Price Index (CPI) after July
16, 1996, or by lowering income standards to applicable levels no lower than those
in effect on May 1, 1988, or by using income/resource methodologies that are less
restrictive than those in effect on July 16, 1996.
Mandatory. States must continue Medicaid assistance for recipients of adoption
assistance and foster care under Title IV-E of the Social Security Act. Transitional
or extended benefits are available to families who lose Medicaid eligibility due to
increased earnings or child or spousal support payments. If the family loses Medicaid
eligibility because of increased earnings or hours of employment, Medicaid coverage
is extended for 12 months. (During the second 6 months a premium can be imposed,
the scope of benefits might be limited, or alternate delivery systems might be used.)
If the family loses Medicaid because of increased child or spousal support, coverage
is extended for 4 months. Pregnant women and children are exempt from TANF
work requirements and retain their Medicaid eligibility.
Optional. States are permitted to cover additional AFDC-related groups. States
may cover children in families whose income and resources are within AFDC
standards (as of July 16, 1996) but who do not meet the definition of a dependent
child (also known as Ribicoff children). States may cover such children up to a
maximum age of 18, 19, or 20, and may limit coverage to reasonable subgroups, such
as children in two-parent families, those in privately subsidized foster care, or those
who live in certain institutional settings.6 Finally, states may deny Medicaid benefits
6
This group will become largely obsolete as states are required to phase in coverage of
children under age 19 with incomes below poverty. However, some states might then still
choose to cover Ribicoff children aged 19 and 20.
CRS-38
to nonpregnant adults and heads of households who lose TANF benefits because of
refusal to work.
Poverty-Related Pregnant Women and Children. Beginning in 1984, Congress
gradually extended Medicaid coverage to groups of pregnant women and children
who are defined in terms of family income and resources,7 rather than in terms of their
ties to cash welfare programs.
Mandatory. States must cover pregnant women and children under age 6 with
family incomes below 133% of the federal poverty income guidelines. (The state may
impose a resource standard that is no more restrictive than that for SSI, in the case
of pregnant women, or AFDC as of July 16, 1996, in the case of children.) Coverage
for pregnant women is limited to services related to the pregnancy or complications
of the pregnancy through 60 days postpartum. Children receive full Medicaid
coverage.
States are also required to cover all children under age 19, who were born after
September 30, 1983, and whose family income is below 100% of the federal poverty
level. The 1983 start date means that the age of mandatory coverage increases each
year until reaching age 18 in FY2002. In FY2000, states must cover children in
poverty between the ages of 6 to 16 years.
Optional. States may cover pregnant women and infants under age 1 with family
incomes up to 185% Federal Poverty Level (FPL). In addition, through other
provisions of Medicaid law (including waivers of eligibility rules), as well as through
Medicaid expansions under the State Children’s Health Insurance Program (described
below), states are permitted to cover additional pregnant women and children with
incomes above applicable federal mandatory minimum levels. For example, as of May
1998, 38 states exceeded the minimum 133% FPL income criteria for pregnant
women, as did 39 states for infants under age 1 year, and 16 states for children ages
1 to 5 years. Similarly, 19 states exceeded the 100% FPL income criteria for children
ages 6 to 14 years.
Prior to full phase-in of mandatory coverage, minimum income levels for
Medicaid eligibility for children ages 14 to 19 years in 1998 were tied to AFDCrelated standards in effect as of July 16, 1996. These income levels were often well
below poverty guidelines. In 1998, 34 states went beyond minimum AFDC-related
income criteria and extended Medicaid eligibility to children ages 14 to 19 years with
family incomes at or above 100% FPL.
Finally, states have the option of continuing Medicaid eligibility for current child
beneficiaries for up to 12 months without a redetermination of eligibility. States are
also allowed to extend Medicaid coverage to children under 19 years of age on the
basis of “presumptive” eligibility until formal determinations are completed.
7
In 1998, the poverty guideline in the 48 contiguous states and the District of Columbia was
$16,450 for a family of four.
CRS-39
Aged and Disabled Persons
SSI-Related Groups. SSI was established in 1972, replacing previous federalstate cash assistance programs for the aged, blind, and disabled. Income and resource
standards are defined by federal law. For 1998, the maximum income was $494 per
month for an individual and $741 for a couple; and for 1999, the amounts were $500
and $751, respectively (higher limits apply to persons with wage income). However,
states have the option of supplementing SSI payments (SSP) for aged persons living
independently, and using the resulting higher income levels as the applicable financial
standard for determining Medicaid eligibility. In the 25 states with these supplements,
the median additional SSP amount in 1998 was $36 per month for an individual living
independently.8
Mandatory. States are generally required to cover SSI recipients. However,
states may use more restrictive eligibility standards for Medicaid than those for SSI
if they were using those standards on January 1, 1972 (before the implementation of
SSI). In 1998, 11 states used more restrictive standards. Known as “Section 209(b)”
states, after the section of the law that created SSI (P.L. 92-603), they are:
Connecticut
Minnesota
Ohio
Hawaii
Missouri
Oklahoma
Illinois
New Hampshire
Virginia
Indiana
North Dakota
These states may use different definitions of disability, more restrictive income
and resource limits, or methodologies for determining income and resources different
from those used under SSI. States using more restrictive income standards must
allow applicants to “spend down”– deduct incurred medical expenses from income
before determining eligibility. For example, if an applicant has a monthly income of
$600 (not including any SSI or state supplement payment) and the state’s maximum
allowable income is $500, the applicant would become eligible for Medicaid after
incurring $100 in medical expenses in that month.
States must continue Medicaid coverage for several defined groups of individuals
who lose SSI or SSP eligibility. The “qualified severely impaired” are disabled
persons who return to work and lose SSI eligibility because of earnings, but still have
the condition that originally rendered them disabled and who meet all nondisability
criteria for SSI except income. Medicaid must be continued for these persons if they
need continued medical assistance to continue working and their earnings are not
sufficient to provide the equivalent of SSI, Medicaid, and attendant care benefits for
which they would qualify in the absence of earnings. States must also continue
Medicaid coverage for persons who were once eligible for both SSI and Social
Security payments and who lose SSI because of a cost-of-living adjustment (COLA)
8
Social Security Administration. Office of Program Benefits Policy. State Assistance
Programs for SSI Recipients, January 1998. Tabulations performed by the Congressional
Research Service (CRS).
CRS-40
in their Social Security benefits. Similar Medicaid continuations have been provided
for certain other persons who lose SSI as a result of eligibility for or increases in
Social Security or veterans’ benefits. Finally, states must continue Medicaid for
certain SSI-related groups who received benefits in 1973, including “essential
persons” (persons who care for a disabled individual).
Optional. States are permitted to provide Medicaid to individuals who are not
receiving SSI but are receiving state-only supplementary cash payments. Effective in
August of 1997, states may make Medicaid available to disabled SSI beneficiaries
with incomes up to 250% FPL. These individuals may “buy into” Medicaid by paying
a premium based on income as determined by the state.
Qualified Medicare Beneficiaries and Related Groups. States must provide
limited Medicaid coverage for “qualified Medicare beneficiaries” (QMBs). These are
aged and disabled persons who are receiving Medicare, whose income is below 100%
of the federal poverty level ($8,240 for a single person and $11,060 for a couple in
1999), and whose assets are below $4,000 for an individual and $6,000 for a couple.
Mandatory. States must pay Medicare Part B premiums (and, if applicable, Part
A premiums) for QMBs, along with required Medicare coinsurance and deductible
amounts. Coverage is restricted to Medicare cost-sharing unless the beneficiary also
qualifies for Medicaid in some other way.
All states must pay Part B premiums (but not Part A premiums or Part A or B
coinsurance and deductibles) for beneficiaries who would be QMBs except that their
incomes are between 100% and 120% of the poverty level. These individuals are
referred to as “specified low-income Medicare beneficiaries” or SLMBs.
There are two additional types of qualifying individuals (QI) who meet the QMB
criteria but have higher income levels and different Medicaid coverage. The QI-1
group is comprised of individuals with income between 120% and 135% of poverty
and for whom Medicaid coverage is limited to payment of the Medicare Part B
premium. The QI-2 group is comprised of individuals with income between 135% to
175% of poverty and for whom Medicaid coverage is limited to payment of a portion
of the Medicare Part B premium.
States are also required to pay Part A premiums, but no other expenses, for
“qualified disabled and working individuals.” These are persons who formerly
received Social Security disability benefits and hence Medicare, have lost eligibility
for both programs, but are permitted under Medicare law to continue to receive
Medicare in return for payment of the Part A premium. Medicaid must pay this
premium on behalf of such individuals who have incomes below 200% of poverty and
resources no greater than twice the SSI standard.
Optional. States are permitted to provide full Medicaid benefits, rather than just
Medicare premiums and cost-sharing, to persons who meet a state-established income
standard that is no higher than 100% of the federal poverty level.
CRS-41
The Medically Needy
As of August 1996, 35 states and other jurisdictions provided Medicaid to at
least some groups of “medically needy” persons. These are persons who meet the
nonfinancial standards for inclusion in one of the covered groups but who do not meet
the income or resource requirements for coverage as categorically needy. Five
additional states operated Medicaid programs under demonstration waivers that
allowed them to serve people not otherwise eligible for Medicaid. The state may
establish higher income or resource standards for the medically needy. In addition,
individuals may spend down to the medically needy standard by incurring medical
expenses, in the same way that SSI recipients in Section 209(b) states may spend
down to Medicaid eligibility.
The state may set its separate medically needy income standard for a family of
a given size at any level up to 133% of the maximum payment for a similar family
under the state’s AFDC program in place on July 16, 1996. States may limit the
groups of individuals who receive medically needy coverage. If the state provides any
medically needy coverage, however, it must include all children under 18 who would
qualify under one of the mandatory categorically needy groups, and all pregnant
women who would qualify under either a mandatory or optional group, if their income
or resources were lower.
Persons Receiving Institutional or Other Long-Term Care and
Related Groups
States may provide Medicaid to certain otherwise ineligible groups of persons
who are in nursing facilities (NFs) or other institutions, or who would require
institutional care if they were not receiving alternative services at home or in the
community.
States may establish a special income standard for institutionalized persons, not
to exceed 300% of the maximum SSI benefit that would be payable to a person living
at home and with no other resources ($1,500 per month in 1999). In states without
a medically needy program, this “300% rule” is an alternative way of providing NF
coverage to persons with incomes above SSI or SSP levels.9
Both the medically needy and those becoming eligible under the 300% rule must
contribute their available income to the costs of their care, retaining only a small
personal needs allowance ($30 to $75 per month for individuals in 1996, depending
on the state) for clothing and other incidental expenses. Medicaid has distinct post-
9
Until OBRA-93, persons with incomes in excess of these limits could not qualify for
Medicaid coverage for their nursing home care, even if their income was insufficient to cover
the costs of such care. OBRA-93 included provisions that allow individuals to deposit excess
income above the 300% limit into a trust, sometimes referred to as a “Miller Trust,” and
receive Medicaid coverage. The funds in the trust are recoverable by the state after the
person’s death. This arrangement, which amounts to a delayed spend-down, has reduced
access barriers that may have been encountered by persons in states that do not otherwise
permit spend-down under Medicaid.
CRS-42
eligibility rules to determine how much of a beneficiary’s income must be applied to
the cost of care before Medicaid makes its payment. Special rules exist for the
treatment of income and resources of married couples when one of the spouses
requires nursing home care and the other remains in the community. These rules are
referred to as the “spousal impoverishment” protections of Medicaid law, because
they are intended to prevent the impoverishment of the spouse remaining in the
community.
A state may obtain a waiver under Section 1915(c) of the Act to provide home
and community-based services to a defined group of individuals who would otherwise
require institutional care. The waiver coverage may include persons who would be
eligible under the 300% rule if they were in an institution.
A state may also provide Medicaid to several other classes of persons who need
the level of care provided by an institution and would be eligible if they were in an
institution. These include children who are being cared for at home, persons of any
age who are ventilator-dependent, and persons receiving hospice benefits in lieu of
other covered services.
CRS-43
Medicaid Purchase of COBRA Coverage
COBRA provides that employees or dependents who leave an employee health
insurance group in a firm with 20 or more employees must be offered an opportunity
to continue buying insurance through the group for 18 to 36 months (depending on
the reason for leaving the group). The employer may charge a premium of no more
than 102% of the average plan cost (150% for months 19 to 29 for certain disabled
persons). Under OBRA 90, state Medicaid programs may pay the premiums for
COBRA continuation coverage when it is cost-effective to do so.
Aliens
Legal immigrants arriving in the United States after August 22, 1996 are
ineligible for Medicaid for 5 years. Coverage of these persons after the 5-year ban is
a state option. States are required to provide Medicaid to legal immigrants who
resided in the country and were receiving benefits on August 22, 1996, and to those
residing in the country as of that date who become disabled in the future.
States are also required to provide coverage to: (1) refugees for the first 7 years
after entry into the United States, (2) asylees for the first 7 years after asylum is
granted, (3) individuals whose deportation is being withheld by the Immigration and
Naturalization Service for the first 7 years after grant of deportation withholding, (4)
lawful permanent aliens after they have been credited with 40 quarters of coverage
under Social Security, and (5) honorably discharged U.S. military veterans, active
duty military personnel, and their spouses and unmarried dependent children.
Qualified aliens and nonqualified aliens who meet the financial and categorical
eligibility requirements for Medicaid may receive emergency Medicaid services.
Benefits
States are required to offer the following services to categorically needy
recipients: inpatient and outpatient hospital services; rural health clinic services;
laboratory and X-ray services; nursing facility services for those over age 21; home
health services for those over age 21 and to those under 21 if entitled to nursing
facility care; the early and periodic screening, diagnostic and treatment program
(EPSDT) for those under age 21; family planning services and supplies; ambulatory
services furnished by federally qualified health centers; nurse-midwife, certified family
and pediatric nurse-practitioner services; and physicians’ services and medical and
surgical dental services furnished by a dentist. States must also assure transportation
of any Medicaid-eligible individual to and from providers of medical care.
Federal law establishes the following requirements for coverage of the medically
needy: (1) if a state provides medically needy coverage to any group, it must provide
ambulatory services to children under 18 and individuals entitled to institutional
services, prenatal and delivery services for pregnant women (as well as 60 days of
postpartum care for those eligible for and receiving pregnancy-related services), and
home health services to individuals entitled to nursing facility services; (2) if the state
provides medically needy coverage for persons in institutions for mental diseases or
CRS-44
intermediate care facilities for the mentally retarded (ICFs/MR), it must offer to all
groups covered in its medically needy program the same mix of institutional and
noninstitutional services as required for the categorically needy or alternatively the
care and services listed in 7 of the 21 paragraphs in the law defining covered services.
Finally, states may also choose to provide one or more optional services to
categorically and medically needy beneficiaries. These additional services include,
for example, drugs, eyeglasses, other dental services, physical therapy, and inpatient
psychiatric care for individuals under age 21 or over 65. States may limit the amount,
duration and/or scope of care provided under any service category (such as limiting
the number of days of covered hospital care or number of physicians’ visits).
Federal law permits states to impose nominal cost-sharing charges on some
Medicaid recipients and services.
Between fiscal years 1996 and 1998, total Medicaid spending increased by about
11% from $159.4 billion to $177.4 billion. In FY1998, Medicaid outlays from federal
funds totaled $100.2 billion and represented 6.1% of all federal outlays. FY1999
Medicaid expenditures are expected to reach $190.1 billion, with federal outlays
estimated at $107.4 billion. Under provisions of the Balanced Budget Act of 1997
(P.L. 105-33), program spending is projected to grow at about 7% per year.
Note: For more information, see: CRS Report 98-132, Medicaid: 105th
Congress, by Melvina Ford, Richard Price and Jennifer Neisner, and CRS Report 97777, Medicaid Expenditures and Beneficiaries, 1997, by Evelyne Parizek and (name r
edacted).
CRS-45
2. Medical Care For Veterans Without ServiceConnected Disability
Funding Formula
Medical care from the Department of Veterans Affairs (VA) is funded by the
federal government. VA medical services are defined as discretionary in the federal
budget. Appropriations requests are guided by estimates of the expected caseload,
and for FY2000, the Administration requested $17.306 billion, an amount equal to its
FY1999 appropriation. VA is also authorized to use proceeds of the Medical Care
Collections Fund (MCCF)1 fund for medical care, an amount estimated to be $608
million in FY1999.
In addition to care provided in VA facilities and under contract, the VA provides
per diem payments to states for care of eligible veterans in state facilities. The VA
also provides for medical care to certain spouses and children of certain serviceconnected disabled and other veterans under the Civilian Health and Medical Program
(CHAMPVA). All but about 10% of the veterans served by VA receive their medical
care free.
Eligibility Requirements2
Unlike other medical benefit entitlements such as Medicare or Medicaid,
eligibility for medical benefits from VA conveys varying degrees of rights. In
principle, all veterans are eligible to receive services from VA medical facilities.
However, the potential total amount of services available to all veterans is contingent
on appropriations. Veterans with high-priority rights are generally assured a full
array of services, and those with lower-priority are provided services if space and
resources are available. There is no evidence that any veterans were denied services
at any VA facility in FY1998, and no denials are expected during FY1999 (except for
nursing home care, which is provided only on a space-available basis, regardless of
priority status).
Highest priority for the full range of medical services is granted to veterans with
severe, service-connected disabilities. Other veterans have varying degrees of access
for the different types of medical services, with distinctions based on the severity of
the condition, whether or not it is service-connected, level of income, and type of
medical service provided. Under legislation enacted in 1996 (P.L. 104-262), access
to care has become less uncertain for some veterans: under provisions of this law,
veterans are able to enroll, according to their level of priority, in VA health plans
1
The MCCF receives reimbursements from medical insurers with some responsibility for care
provided by VA to veterans enrolled in those insurer’s health plans, and copayments and
deductibles paid by about 10% of veterans receiving care whose eligibility obligates them for
such cost sharing.
2
Eligibility rules are set forth in 38 C.F.R. Part 17.47 (1998). This program is No. 64.009
in the Catalog of Federal Domestic Assistance.
CRS-46
administered regionally. Enrolled veterans are to receive whatever services are
indicated in the most efficient venue available.
The largest category of eligible veterans served by VA are those who qualify for
free care because their assets and income are below certain annually adjusted
standards (in 1999: single person, $22,351; with one dependent, $26,824; for each
additional dependent, $1,496). Veterans whose incomes in the previous calendar year
are no higher than the pension of a veteran in need of regular aid and attendance (in
1999: single person, $14,647; with one dependent, $17,365; for each additional
dependent, $1,368) are also eligible for free medications; others pay copayments of
$2 monthly for prescriptions filled in VA pharmacies. VA estimates that about 7
million veterans qualify for free care because they meet the low-income standards.
A veteran applying for care under the low-income eligibility test is advised that
reported income is subject to verification by matching the amount shown on the
application with income reported to the Internal Revenue Service (IRS). Once
eligible under the income rules, a veteran remains eligible until determined upon
(annual) reevaluation to no longer meet the income standard.
For years before FY1999, it is estimated that roughly 58% of the total cost of
VA medical services could be attributed to persons who met an income test.
However, under a changed method for recording access to medical services, VA
estimates that about 38% of the applications for medical services in FY1999 were
from veterans entitled to free care because of meeting the income standards.3
Benefit Levels
Benefits in VA facilities include inpatient hospital care, nursing home care,
domiciliary care, and outpatient care. The VA contracts with other facilities to
provide care to veterans in areas where VA medical facilities are unavailable. VA is
the largest provider of inpatient psychiatric services, specializes in treatments for
spinal injuries and prosthetics, and conducts or sponsors research in numerous
medical fields, with special emphasis on conditions traceable to a period of military
service. The VA offers medical care to the Nation’s 25 million veterans, although a
relatively few (about 14%) of those eligible avail themselves of the services. In
FY1998, the VA provided care for 3.43 million persons, through 778,136 inpatient
episodes and 35.8 million outpatient visits.
During FY1999, the Veterans Health Administration (VHA) operated 172
hospitals, 132 nursing homes, over 600 outpatient clinics, 40 domiciliaries, and an
extensive pharmaceutical supply apparatus. Veterans’ medical care costs were $17.7
billion in FY1998, and were projected to reach $17.8 billion in FY1999 and $18.1
billion in FY2000.
3
Data from VA show that about 38% of veterans who applied for care since the inception of
enrollment in VA health care plans at the start of FY1999 qualified as a result of meeting the
means-tested requirements for VA health care or qualified because of being eligible for other
means-tested programs such as VA pensions or Medicaid.
CRS-47
3. General Assistance (Medical Care Component)1
Funding Formula
No federal funds are available for this program.
As of mid-1998, medical assistance for recipients of non-federally funded cash
aid (generally known as General Assistance (GA)) and for other persons ineligible for
Medicaid2 was offered in 32 states, including the District of Columbia (D.C.). In 13
jurisdictions this aid was fully state funded;3 in seven states, costs generally were paid
by a combination of state and local funds;4 in seven states medical benefits were
wholly paid with local funds.5 In five states, even though they were not in categories
usually eligible for federally-funded medical assistance, recipients of GA cash received
Medicaid.6 This aid was allowed under waivers from Medicaid law, and costs were
paid by federal and state funds. In the remaining 19 states, ongoing medical benefits
generally were not offered to persons ineligible for federally-funded aid.7
Eligibility Requirements
To receive GA medical assistance, a person generally must be deemed needy and
live where the program is available. In 1998, most of the 32 states offering this aid
made eligible all recipients of GA cash payments, but several specified that persons
had to be in medical need and some imposed special medical income eligibility
1
Most state data reported here are based on the most recent national study of state general
assistance programs (1998) and subsequent information from some states. The national
study, entitled State General Assistance Programs, 1996, was conducted by the Urban
Institute in the summer of 1998 as part of the Institute’s project on Assessing the New
Federalism.
2
Using waivers from federal law, some states provide Medicaid to all recipients of GA cash
benefits, even if they are not in categories usually eligible.
3
Alaska, Connecticut, Kansas, Maryland, Michigan, Minnesota, Missouri, Nebraska
(program for the disabled), Pennsylvania, Rhode Island, Utah, Vermont, and Washington.
4
Illinois, Maine, New Jersey, New York, Ohio, Virginia (some counties) and Wisconsin (some
counties).
5
California, Idaho, Montana (some counties), Nevada, New Hampshire, North Carolina
(some counties) and South Dakota. (Not counted here in Nebraska’s program for the
nondisabled, which provides medical aid at county expense.)
6
Delaware, D.C., Hawaii, Massachusetts, and Oregon. In addition, Tennessee, which has no
GA cash program, offered medical aid to a wide range of needy persons under a Medicaid
waiver.
7
Ten of these states had no statewide GA program (Alabama, Arkansas, Louisiana,
Mississippi, Oklahoma, South Carolina, Tennessee, Texas, West Virginia, and Wyoming).
Arizona, Colorado, and New Mexico offered uniform statewide cash GA but no GA medical
assistance; in some of their counties, Florida, Georgia, Kentucky, and North Dakota offered
GA cash aid, but no medical benefits; Indiana and Iowa offered GA cash aid statewide, but
not medical benefits.
CRS-48
requirements. Thus, Ohio offered medical assistance to all GA recipients and to
needy able-bodied persons who would become incapacitated without medication. On
the other hand, some states and counties set more liberal eligibility rules for GA
medical assistance than for GA cash aid.
Benefit Levels
Using waivers from federal law, some states in mid-1998 made all GA recipients
eligible for Medicaid and its comprehensive services: Delaware (for its Diamond
State Health Plan), Hawaii (for QUEST), and Oregon (for the Oregon Health Plan).
D.C. and Massachusetts also offered Medicaid to all GA cash recipients. Among the
other 27 states with medical assistance for recipients of GA cash, benefits generally
were less comprehensive than those of Medicaid. Five states8 offered inpatient and
outpatient hospital care, physician services, and prescription drugs; another six9 added
nursing home care to the foregoing list of benefits. Some restricted GA medical
benefits to physician services and prescription drugs, and some offered aid only in
emergencies. Maryland’s programs of Primary Care for the Medically Indigent and
Maryland Pharmacy Assistance (for GA disabled adults and others who meet medical
income eligibility limits) provided only basic physician services and a limited list of
prescription drugs. The Urban Institute study noted that most of the states and
counties without a medical component in their GA program have alternative medical
assistance available to at least some GA cash recipients. Examples include indigent
health care programs or charity hospital systems.
Preliminary estimates of the U.S. Department of Health and Human Services
(HHS) indicate that state-local outlays for GA medical assistance in FY1998 totaled
$4,955.9 billion, down 10.2% from the FY1992 record high of $5,515.8 billion.
These data exclude premiums paid by welfare agencies for Medicare and for health
maintenance organizations (HMOs) and health insurance, which presumably are
reimbursed by Medicaid.
Here is the composition of FY1998 GA medical spending: hospital care, 52.4%;
prescription drugs, 24.4%; payments to medical professionals, 14.8% (physicians,
7.3%; dentists, 1.3%; and other professionals, 6.2%). Home health care accounted
for 2.3% of outlays, nursing homes, 3%; other care, 3%; and durable medical
equipment, 0.1%. The composition of GA medical outlays changed over the 19881998 decade. The share spent on prescription drugs rose more than 50%, and the
share used for home health care tripled. The shares paid for hospital care and for
physicians declined by 10% and 58%, respectively.
8
California (Los Angeles County); Connecticut; Illinois (Chicago), prescription drugs only
if required for life maintenance or to avert a life-threatening condition; Minnesota; and
Missouri.
9
Idaho (Ada County); Kansas; Nebraska; Nevada (Clark County); South Dakota (Minnehaha
Country); and Washington.
CRS-49
4. Indian Health Services
Funding Formula
Indian Health Service (IHS) appropriations are allocated among its 12 service
areas through a “historical,” or “program continuity” basis, under which each area can
expect to receive its recurring base budget from the previous year, plus an increase
in certain mandatory cost categories. In addition, the service uses a Resource
Allocation Methodology (RAM) to distribute a small portion of its appropriation to
areas and tribes based on documented health deficiencies. Additionally, tribes have
the option of assuming from the IHS the administration and operation of health
services and programs in their communities in order to encourage the maximum
participation of tribes in the planning and management of those services. The Service
collects reimbursements from the Medicare and Medicaid programs for services
provided by IHS to members of its eligible population who are also eligible for those
programs. Expenditures in FY1998 were $2.099 billion. The FY1999 appropriation
was $2.242 billion.
Eligibility Requirements1
Persons eligible under regulations of the Public Health Service are persons of
Indian (or Alaskan Native) descent who: (1) are members of a federally recognized
Indian tribe; (2) reside within an IHS Health Service Delivery Area (HSDA); or (3)
are not members of a federally recognized tribe but are the natural minor children (18
years old or younger) of such a member and reside within an IHS HSDA. The
program serves federal reservations, Indian communities in Oklahoma and California,
and Indian, Eskimo, and Aleut communities in Alaska. In addition, under the Indian
Health Care Improvement Act of 1976, P.L. 94-437, as amended, the IHS contracts
with 34 urban Indian organizations to make health services more accessible to the
urban Indian population. The program imposes no income test, but is presumed to
serve primarily needy persons, inasmuch as 50.7% of American Indians living on or
near reservations in 1990 had incomes below the poverty threshold. At the time an
estimated 81% of Indians lived on or near reservations (within IHS Service Areas).
Benefit Levels
The IHS of the Public Health Service provides hospital, medical, and dental care
and environmental health and sanitation services. Included are outpatient services and
the services of mobile clinics and public health nurses, as well as preventive care,
including immunizations and health examinations of special groups, such as school
children. All services are provided free of charge to beneficiaries.
Benefits include inpatient and outpatient health services through 49 IHS
hospitals, 12 Tribal hospitals, 209 health centers, and several hundred other smaller
health stations and satellite clinics; school health centers; contracts with nonfederal
1
Regulations are found at 42 C.F.R. Part 36 (1998). This program is No. 93.228 in the
Catalog of Federal Domestic Assistance.
CRS-50
hospitals, clinics, private physicians and dentists; and contractual arrangements with
state and local health organizations.
FY1998 program expenditures totaled $2.099 billion, up 2% from the FY1997
total of $2.057 billion. In FY1998 the annual service population was an estimated
1.46 million persons.
CRS-51
5. Maternal and Child Health Services Block Grant,
Title V of the Social Security Act1
Funding Formula
The Maternal and Child Health (MCH) Services Block Grant supports activities
to improve the health status of mothers and children. Most of the funds are
distributed to state governments to pay for services; however, portions of the funds
are set aside for use by the federal government to finance special projects of regional
and national significance (SPRANS) and the community integrated service systems
program (CISS).
Most of the funds appropriated for the MCH block grant each year are allocated
to the states by a percentage method based on: (1) FY1981 levels of funding for
programs which were combined into the block grant when it was authorized in 1981;
and (2) the number of low-income children in the state. States must contribute $3 for
every $4 of federal funds awarded. States are required to use at least 30% of their
block grant allocations for preventive and primary care services for children and 30%
for services for children with special needs. The remaining 40% may be used, at the
state’s discretion, for services for either of these groups or for other appropriate
maternal and child health services, including preventive and primary care services for
pregnant women, mothers, and infants up to age 1. States may use no more than 10%
of their allocations for administrative costs.
Federal law requires that 15% of the appropriation for the block grant up to
$600 million be set aside for SPRANS activities in categories that include research,
training, genetic disease programs and newborn genetic screening, hemophilia
programs, and maternal and child health improvement, especially infant mortality.
When the appropriation for the block grant exceeds $600 million, the law
authorizes that 12.75% of the amount over $600 million be set aside for CISS
projects. Funds from this set-aside are used for initiatives including case management,
projects to increase the participation of obstetricians and pediatricians in both the
block grant program and Medicaid, integrated delivery systems, rural or hospitalbased MCH projects, and community-based programs including day care for children
who usually receive services on an inpatient basis.
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996,
P.L. 104-193 (also known as the Welfare Reform Act) amended Title V to enable
states to provide abstinence education. The Act appropriated $50 million to the states
annually for FY1997 through FY2002 and requires states to match $3 for every $4
1
P.L. 97-35, the Omnibus Budget Reconciliation Act of 1981, established a Maternal and
Child Health (MCH) Services Block Grant under Title V of the Social Security Act. The
block grant replaced the previous programs of Maternal and Child Health Services and
Crippled Children’s Services, also in Title V, and included the following other existing federal
programs: supplemental security income services for disabled children, lead-based paint
poisoning prevention, genetic diseases, sudden infant death syndrome, hemophilia centers, and
adolescent pregnancy prevention.
CRS-52
they receive under an allotment formula. The MCH bureau is to distribute the funds
under a formula based upon the ratio of the number of low-income children in the
state to the total of all low-income children in all states. Monies that would have been
provided to states that do not accept abstinence education grants must be returned to
the U.S. Treasury.
Eligibility Requirements2
States determine eligibility criteria for the services they provide under the MCH
block grant. The law provides that block grant funds are to be used by the states “to
provide and to assure mothers and children (in particular those with low income or
with limited availability of health services) access to quality maternal and child health
services.” Low-income mothers and children are those with family income below
100% of federal poverty guidelines — $16,700 per year for a family of four in 1999
(higher in Alaska and Hawaii).
Benefit Levels
States determine the level of services provided under the block grant. These
services may include prenatal care, well-child care, dental care, immunization, family
planning, and vision and hearing screening services. They may also include inpatient
services for children with special health care needs, screening services for lead-based
poisoning, and counseling services for parents of sudden infant death syndrome
victims.
States are allowed to charge for services provided; however, states may not
charge mothers and children whose family incomes are below federal poverty
guidelines. Charges must be based on a sliding scale that reflects the income,
resources, and family size for those with family incomes above poverty.
The appropriation for the block grant program for FY1999 was $695 million.
In FY1997 Title V provided services to 1.96 million pregnant women, 2.9 million
infants, 16.4 million children and adolescents, .8 million children with special health
care needs, and 1.8 million other women of child-bearing age.
2
Regulations are found at 45 C.F.R. Part 96 (1998). This program is No. 93.994 in the
Catalog of Federal Domestic Assistance.
CRS-53
6. Consolidated Health Centers
Funding Formula
The Health Centers Consolidation Act of 1996, P.L. 104-299, consolidated
community health centers, migrant health centers, health centers for the homeless, and
health centers for residents of public housing under a single administrative authority
under Section 330 of the Public Health Service Act.1 The new program of
consolidated health centers became effective for FY1997. The Act also includes a
managed care loan program to guarantee loans made by nonfederal lenders to health
centers for construction or renovation of facilities, to operate managed care networks,
or to develop health maintenance organizations. In the conference report on the
omnibus appropriations bill for FY1997, P.L. 104-208, the conferees increased
funding for the health centers program in part so that the Native Hawaiian health care
program could be supported under the broader health centers budget line.
In awarding grants to migrant health centers, health centers for the homeless, and
health centers for residents of public housing for FY1997, the Secretary of HHS had
to ensure that the proportion of amounts made available to these centers equaled the
proportion of amounts received in FY1996. For FY1998 and FY1999, the
proportions of the total appropriation for these centers may not vary by more than
10% from amounts received in the preceding year.
Centers receive grant money to provide primary care services to groups that are
determined to be medically underserved. Grants are awarded through the Bureau of
Primary Health Care of the Health Resources and Services Administration (HRSA)
of the U.S. Department of Health and Human Services (HHS). Centers are required
to seek third-party reimbursement from other sources, such as Medicare and
Medicaid. State and local governments may also contribute. Centers may receive one
or more of the following types of grants: (1) planning grants, to plan and develop
health centers or a comprehensive service delivery network; (2) operating grants, to
assist with operation costs of a center; and (3) infant mortality grants, to assist in the
reduction of infant mortality and morbidity among children less than 3 years of age
and to develop and coordinate service and referral arrangements between health
centers and other entities for the health management of pregnant women and children.
Eligibility Requirements2
A health center is an entity that provides health care services to a medically
underserved population, or a special medically underserved population comprised of
migratory and seasonal agricultural workers, the homeless, and residents of public
1
In previous editions of this report, community health centers and migrant health centers were
included, but homeless health centers and public housing health centers were inadvertently
omitted. (The historical data in this report series now have been revised to include
expenditures for all the consolidated centers.)
2
Regulations for community health centers are found at 42 C.F.R. Subpart 51c (1998). This
program is No. 93.224 in the Catalog of Federal Domestic Assistance.
CRS-54
housing by providing required primary health services and additional health services
as may be appropriate for particular centers. By regulation, medically underserved
areas are designated by the Secretary of HHS after taking into consideration such
factors as: (1) ratio of primary care physicians to population, (2) infant mortality rate,
(3) percentage of population aged 65 and over, and (4) percentage of population with
family income below the poverty level.
All residents of an area served by a health center are eligible for its services.
Benefit Levels
Regulations limit free service to families with income at or below the federal
poverty income guidelines. The 1999 federal poverty income guideline in the 48
contiguous states was $16,700 for a family of four. Nominal fees may be collected
from these individuals and families, under certain circumstances. Individuals and
families with annual incomes greater than the poverty guideline but below 200% of
it are required to pay for services from a fee schedule adjusted on the basis of the
patient’s ability to pay. Full payment is required from those with income that exceeds
twice the poverty level.
The centers provide a range of primary health services on an ambulatory basis,
including diagnostic, treatment, preventive, emergency, transportation, and preventive
dental services. They can arrange and pay for hospital and other supplemental
services in certain circumstances if approved by the Secretary.
Funding for the health centers for FY1999 was $925 million (appropriations) and
the annual service population was an estimated 10.2 million persons.
Note: For more information, see CRS Report 97-757, Health Centers, by Sharon
Kearney.
CRS-55
7. Title X Family Planning Services
Note: This program began operations in 1971, but was inadvertently omitted
from editions of this report before 1991.
Funding Formula
Grants are provided for voluntary family planning services through the family
planning program, established by Title X of the Public Health Service Act. There is
no requirement that grantees match federal funds at a specified rate, but regulations
specify that no family planning clinic project may be fully supported by Title X funds.
Congress has continued to appropriate money for the program even though Title X
has not been reauthorized since FY1985. Grants for family planning clinics are made
to states and territorial health departments, hospitals, universities and other public and
nonprofit agencies.
Eligibility Requirements1
The law requires that priority for clinic services go to persons from low-income
families. Clinics must provide family planning services to all persons who request
them, but the priority target group has been women aged 15-44 from low-income
families who are at risk of unplanned pregnancy. Clinics are required to encourage
family participation.
Clinics must provide services free of charge (except to the extent that Medicaid
or other health insurers cover these services) to persons whose incomes do not exceed
100% of the federal poverty income guidelines ($16,700 for a family of four in the 48
contiguous states in 1999). A sliding payment scale must be offered for those whose
incomes are between 100% and 250% of the poverty guideline.
Benefit Levels
Participating clinics must offer a broad range of family planning methods and
services. Required services include natural family planning methods and supplies,
counseling services, physical examinations (including testing for cancer and sexually
transmitted diseases), infertility services, services for adolescents, pregnancy tests,
periodic follow-up examinations, referral to and from other social and medical service
agencies, and ancillary services. The law forbids use of any Title X funds in programs
where abortion is a method of family planning.
In FY1999, approximately 5 million persons received family planning services
through 4,600 clinic sites supported by 95 service grantees. Federal funding totaled
$215 million. An estimated one-third of all clients served at Title X clinics, 1.7 million
per year, are adolescents.
1
Regulations governing Title X family planning services are found in Part 59, Subpart A, 42
C.F.R. (1998). This program is No. 93.217 in the Catalog of Federal Domestic Assistance.
CRS-56
8. The State Children’s Health Insurance Program
(S-CHIP)1
The Balanced Budget Act of 1997 (BBA 97, P.L. 105-33) established the State
Children’s Health Insurance Program (S-CHIP) under a new Title XXI of the Social
Security Act. The program offers federal matching funds to enable states and
territories to extend health insurance coverage to “targeted” low-income children –
those whose family income exceeds Medicaid eligibility thresholds and who do not
have private health insurance coverage.
Funding Formula
The 1997 law appropriated a total of $39.7 billion in federal matching grants for
10 years, FY1998 through FY2007.2 To receive federal funds, states must submit a
plan describing their program to the Health Care Financing Administration for
approval. A state with an approved plan has three fiscal years in which to draw down
a given year’s funding. A total of $4.295 billion was appropriated to states and
territories for FY19983 and $4.307 billion for FY1999.4 Allotment of funds among
the states is based on a combination of the number of low-income children and lowincome, uninsured children in the state.
Like Medicaid, the S-CHIP is a federal-state matching program. For each dollar
of state spending, the federal government makes a matching payment. The state’s
share of program spending is equal to 100% minus the enhanced federal matching
assistance percentage (the enhanced FMAP). The enhanced FMAP is equal to the
state’s Medicaid FMAP (see program no. 1), increased by the number of percentage
points that is equal to 30% multiplied by the number of percentage points by which
the FMAP is less than 100%.5
1
Proposed regulations implementing S-CHIP can be found in the Federal Register, November
9, 1999, p. 60881-60963. The program is No. 93.767 in the Catalog of Federal Domestic
Assistance.
2
The law sets aside 0.25% of S-CHIP funds for territories and commonwealths (Puerto Rico,
Guam, Virgin Islands, American Samoa, and the Northern Marianas). It also sets aside $60
million annually for Special Diabetes Grants for FYs 1998 through 2002 only.
3
The original FY1998 S-CHIP appropriation of $4.275 billion was increased to $4.295
billion by P.L. 105-100.
4
For FY1999 only, a special extra appropriation of $32 million for the territories was made
by P.L. 105-174 (in addition to the regular $4.275 billion appropriation).
5
For example, if a state has a Medicaid FMAP of 60%, under Medicaid a state must spend
40 cents for every 60 cents that the federal government contributes. The enhanced FMAP
would be equal to the Medicaid federal matching percentage increased by 12 percentage
points, (60%+[30% multiplied by 40 percentage points]=72%.) The state share would be
equal to 100%-72%=28%. Compared with Medicaid FMAPs, which range from 50% to 77%
in FY1998, the enhanced FMAP for the S-CHIP programs ranges from 65% to 84%. All SCHIP assistance for targeted low-income children, including child health coverage provided
(continued...)
CRS-57
There is a limit on spending for S-CHIP administrative expenses, which include
activities such as data collection and reporting, as well as outreach and education.
For federal matching purposes, a 10% cap applies to state administrative expenses.
It is imposed on the dollar amount that the state actually draws down from its
allotment to cover benefits under S-CHIP, as opposed to 10% of its total allotment.
Eligibility Requirements
Each state defines the group of targeted low-income children who may enroll in
S-CHIP. The law allows states to use the following characteristics in determining
eligibility: geography, age, income and resources, residency, disability status, access
to other health insurance and duration of eligibility for other health insurance. Title
XXI program funds cannot be used for children who are eligible for the state’s
Medicaid plan or for children covered by a group health plan or other insurance.
Under S-CHIP states may cover children in families with incomes that are either:
(1) above the state’s Medicaid eligibility standard but less than 200% of the federal
poverty guideline,6 or (2) in states with Medicaid income levels for children already
at or above 200% of the poverty line, within 50% over the state’s current Medicaid
income eligibility limit for children. States may choose from three options when
designing their S-CHIP programs. They may expand their current Medicaid program,
create a new “separate state” insurance program, or devise a combination of both
approaches. Under limited circumstances, states have the option to purchase a health
benefits plan that is provided by a community-based health delivery system or to
purchase family coverage under a group health plan as long as it is cost effective to
do so.7
Benefit Levels
States that chose to expand Medicaid to new eligibles under S-CHIP must
provide the full range of mandatory Medicaid benefits, as well as all optional services
specified in their state Medicaid plans. Alternately, states may choose any of three
other benefit options: (1) a benchmark benefit package, (2) benchmark equivalent
coverage, or (3) any other health benefits plan that the Secretary determines will
provide appropriate coverage to the targeted population of uninsured children.8
5
(...continued)
under the Medicaid program, is eligible for the same enhanced FMAP. The enhanced FMAP
is subject to a ceiling of 85%.
6
In 1999, 200% of the federal poverty guideline was $22,120 for a family of two, $27,760
for a family of three, and $33,400 for a family of four (higher in Alaska and Hawaii).
7
In the case of community-based health delivery systems, the cost of coverage cannot exceed,
on an average per child basis, the cost of coverage that would otherwise be provided. In the
case of family coverage, the alternative must be cost-effective relative to the amount paid to
obtain comparable coverage only of the targeted low-income children, and it must not
substitute for health insurance coverage that would be otherwise be provided to the children.
8
Three existing state programs, in Florida, New York, and Pennsylvania, were grand(continued...)
CRS-58
A benchmark benefit package is one of the following three plans: (1) the
standard Blue Cross/Blue Shield preferred provider option plan offered under the
Federal Employees Health Benefits Program (FEHBP), (2) the health coverage that
is offered and generally available to state employees in the state involved, and (3) the
health coverage that is offered by an HMO with the largest commercial (nonMedicaid) enrollment in the state involved.
Benchmark equivalent coverage is defined as a package of benefits that has the
same actuarial value as one of the benchmark benefit packages. A state choosing to
provide benchmark equivalent coverage must cover each of the benefits in the “basic
benefits category.” The benefits in the basic benefits category are inpatient and
outpatient hospital services, physicians’ surgical and medical services, lab and x-ray
services and well-baby and well-child care, including age-appropriate immunizations.
Benchmark equivalent coverage must also include at least 75% of the actuarial value
of coverage under the benchmark plan for each of the benefits in the “additional
service category.” These additional services include prescription drugs, mental health
services, vision services, and hearing services. States are encouraged to cover other
categories of services not listed above. Abortions may not be covered, except in the
case of a pregnancy resulting from rape or incest, or when an abortion is necessary
to save a mother’s life.
Title XXI gives states authority to determine the amount, duration and scope
of the services covered unless the state chooses to provide a benchmark plan.
Benchmark equivalent plans may limit their benefit packages in any way they chose
as long as the entire package is certified to be an actuarial equivalent of the
benchmark plan.
Federal law permits states to impose cost-sharing for some beneficiaries and
services. States that choose to implement S-CHIP as a Medicaid expansion must
follow the cost-sharing rules of the Medicaid program. If the state implements SCHIP through a separate state program, premiums or enrollment fees may be
imposed, but they are subject to limits. For families with incomes under 150% of the
federal poverty line, premiums may not exceed the amounts set forth in federal
Medicaid regulations.9 Additionally, families with incomes less than 150% of the
poverty line may be charged service-related cost sharing (regardless of family
income), but this cost-sharing is limited to nominal amounts as defined in Medicaid
regulations).10
For families with income above 150% of the federal poverty line, service-related
cost sharing may be imposed in any amount, provided cost-sharing for higher income
children is not lower than cost-sharing for lower income children. However, the total
annual aggregate cost-sharing (including premiums, deductibles, co-payments and any
other charges) for all targeted low-income children in a family may not exceed 5% of
8
(...continued)
fathered in as meeting the minimum benefits requirements under S-CHIP.
9
42 C.F.R. Part 447.52 (1998)
10
42 C.F.R. Part 447.54 (1998)
CRS-59
total family income for the year. In addition, states must inform families of these
limits and provide a mechanism for families to stop paying once the cost-sharing limits
have been reached.
In its March 1999 baseline, the Congressional Budget Office (CBO) estimated
FY1998 federal outlays for S-CHIP at $100 million, all for Medicaid expansions, and
FY1999 outlays at $800 million ($500 million for separate state programs and $300
million for Medicaid expansions). Preliminary enrollment estimates indicate that
nearly one million children (982,000) were enrolled in S-CHIP under 43 operational
state programs as of December 1998.11 The Kaiser Commission on Medicaid and the
Uninsured estimates that an additional 476,000 children were enrolled in S-CHIP
from December 1998 to June 1999, raising total enrollment to an estimated 1.3
million.12 As of September 7, 1999, all 56 jurisdictions had approved S-CHIP plans,
and HHS reported that the states and territories estimated that enrollment would total
2,684,300 children by September 2000. For state-by-state enrollment status, see
[http://www.hcfa.gov/init/chstatus.htm].
Note: For more information, see: CRS Report 98-692, The State Children’s
Health Insurance Program: Implementation Progress, by Evelyne Parizek, Elicia
Herz, and Cecilia Oregón Echeverría. Also see: CRS Report 97-926, The State
Children’s Health Insurance Program: Guidance on Frequently Asked Questions,
by (name redacted) and Jennifer Neisner.
11
U.S. Health Care Financing Administration. A Preliminary Estimate of the Children’s
Health Insurance Program Aggregate Enrollment Numbers Through December 31, 1998
(background only). April 20, 1999.
12
Bureau of National Affairs. 2.3 Million Children Now Enrolled in CHIP Plans, Survey
of States Finds. Health Care Daily Report, v. 4, no. 147, August 2, 1999.
CRS-60
9. Medical Assistance to Refugees and
Cuban/Haitian Entrants
Funding Formula
Subject to available appropriations, the Immigration and Nationality Act (INA)
authorizes 100% federally funded medical assistance for needy refugees during their
first 3 years in the United States. Title V of the Refugee Education Assistance Act
(P.L. 96-422), popularly referred to as the Fascell-Stone amendment, authorizes
similar assistance for certain Cubans and Haitians who have recently entered the
United States. In the past but not currently, the federal refugee assistance program
has reimbursed states 100% for the nonfederal share of Medicaid payments to
refugees and entrants who qualify for that program. It also provides “refugee medical
assistance” (RMA) to needy refugees and entrants who are not categorically eligible
for Medicaid. Since FY1992, assistance under this authority has been limited to
RMA for needy refugees not categorically eligible for Medicaid during their first 8
months after entry.
Eligibility Requirements1
A person must (a) have been admitted to the United States as a refugee under
provisions of the Immigration and Nationality Act, or (b) be a Cuban or Haitian
paroled into the United States between April 10 and October 10, 1980, and
designated “Cuban/Haitian entrant,” or (c) be a Cuban or Haitian national who arrived
in the United States after October 10, 1980, who has an application for asylum
pending or is subject to exclusion or deportation and against whom a final order of
deportation has not been issued.
If a needy refugee or entrant is eligible for Medicaid, he may receive assistance
under that program. If a refugee or entrant meets the income and assets tests
prescribed by his state of residence for Medicaid eligibility but does not otherwise
qualify for that program because of its categorical requirements, such as family
composition, the refugee or entrant is eligible for RMA.
Impact of P.L. 104-193, as amended. Under the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996, as amended by P.L. 105-33, refugees
who qualify for Medicaid are now eligible for 7 years after entry, as opposed to
permanently under prior law. At the end of the 7-year period, their continued
participation is at state option, as it is with other “qualified aliens.” Wyoming and
Louisiana have opted to limit noncitizens to emergency Medicaid only. To date, the
new welfare legislation has had no direct impact on the medical component of the
HHS/ORR program.
1
Regulations governing this program are found in 45 C.F.R. Parts 400-401 (1998). This
program is No. 93.566 in the Catalog of Federal Domestic Assistance.
CRS-61
Benefit Levels
Medical benefits consist of payments made on behalf of needy refugees to
doctors, hospitals, and pharmacists. Federal law requires state Medicaid programs
to offer certain basic services, but authorizes states to determine the scope of services
and reimbursement rates, except for hospital care.
CRS-62
Cash Aid
CRS-63
10. Supplemental Security Income (SSI)
Funding Formula
Since its January 1974 beginning, Supplemental Security Income (SSI) — has
provided a minimum income floor, financed by U.S. general revenue and administered
by the Social Security Administration (SSA), to persons eligible under federal rules.
States may provide additional payments to SSI recipients at their own expense. In
addition, a “grandfather” clause requires states to provide supplements to a small
number of persons, previously enrolled in the pre-SSI programs of federal-state cash
aid for needy aged persons and blind or disabled adults, whose income otherwise
would fall short of its December 1973 level.1
If a state chooses to have the federal government administer its supplements, it
must agree to provide supplements for all federal SSI recipients of the same class and
pay an administration fee to SSA for the service.2 If states administer their own
supplements, they are generally free to design their own supplementary programs and
may adopt more restrictive eligibility rules than those of SSI. In FY1998, the federal
government administered supplements for 16 jurisdictions.
In FY1998, federal funds paid 87.6% of total SSI benefits (federal benefits plus
state supplements) of $31.3 billion. As of January 1999, the federal share of
maximum SSI benefits ranged from 58% in Alaska and 74% in California to 100% in
the eight jurisdictions where no recipient received a supplement (Arkansas, Georgia,
Kansas, Mississippi, Tennessee, Texas, West Virginia, and the Northern Mariana
Islands).
Eligibility Requirements3
Title XVI of the Social Security Act entitles to SSI payments persons who are
(1) aged 65 and over, blind or disabled (adults and children of any age); (2) whose
counted income and resources fall within limits set by law and regulations, and (3)
who live in one of the 50 states, the District of Columbia, or the Northern Mariana
Islands. Also eligible is a child who lives overseas with a parent who is on military
assignment, provided the child received SSI before the parent reported for overseas
duty.
1
The U.S. Department of Health and Human Services (HHS) reported the number of
recipients of mandatory state supplementary payments at 2,500 in December 1997.
2
P.L. 103-66 required states, effective in FY1994, to pay for federal administration of state
supplementary payments. For FY1994, the fee was $1.67 per monthly payment. The rate
rose to $3.33 in FY1995 and to $5.00 in FY1996. P.L. 105-33 increased the fee to $6.20 in
FY1998, $7.60 in FY1999, $7.80 in FY2000, $8.10 in FY2001 and $8.50 in FY2002.
Thereafter, rates are to be adjusted for changes in the Consumer Price Index or set as a level
determined by the Commissioner of Social Security.
3
Federal regulations governing SSI are found in 20 C.F.R. Part 416 (1999). Income and
resources rules are in Subparts K and L, respectively. This program is No. 96.006 in the
Catalog of Federal Domestic Assistance.
CRS-64
To be eligible for SSI on grounds of disability, an adult must be unable to engage
in any “substantial gainful activity”4 because of a medically determined physical or
mental impairment expected to result in death or that has lasted, or can be expected
to last, for at least 12 months. Pursuant to P.L. 104-193, signed into law on August
22, 1996, a child under age 18 may qualify as disabled if he or she has an impairment
that results in “marked and severe” functional limitations.
In addition, to qualify for SSI a person must be (1) a citizen of the United States
or if not a citizen, (a) an immigrant who was enrolled in SSI on August 22, 1996 or
who entered the U.S. by that date and subsequently became disabled; (b) a refugee or
asylee who has been in the country or granted asylum, respectively, for fewer than 7
years, (b) a person who has worked long enough to be insured for Social Security,
usually 10 years (work test gives credit to work by spouse or parent of an alien child);
or (c) a veteran or active duty member of the armed forces (spouses or unmarried
dependent children of veterans/military personnel also qualify).
For basic federal benefits, countable income limits (calendar year 1999) are $500
monthly per individual and $751 per couple. These income ceilings equal maximum
federal benefits of the program (see below for benefit details). For states with
supplementary SSI benefits, countable income limits are higher, ranging up to $862
monthly per individual (living independently) in Alaska.
Countable resources may not exceed $2,000 per individual and $3,000 per
couple in 1989 and years thereafter. Excluded assets include a home; the first $2,000
in equity value of household goods and personal effects; the full value of an auto if
needed for employment or medical treatment, or if modified for use by a handicapped
person, otherwise, the first $4,500 in market value of the auto; and a life insurance
policy not exceeding $1,500 in cash surrender value and burial plots and funds,
subject to a limit.
P.L. 98-21 requires the Social Security Administration (SSA), when notifying
Social Security beneficiaries aged 64 about their approaching eligibility for Medicare,
to inform them also about SSI.
Benefit Levels
The Social Security Act establishes benefit levels and requires that whenever
Social Security benefits are increased because of an automatic cost-of-living
adjustment (COLA), SSI benefits be increased at the same time and by the same
percentage.
4
Defined by regulation as monthly earnings, net of impairment-related expenses, of $700,
effective July 1, 1999. Previously the amount was $500.
CRS-65
SSI basic monthly guarantees:5
1996
1997
1998
1999
Individual
$470
$484
$494
$500
Couple
$705
$726
$741
$751
From 1975 through 1982, COLAs were paid each July. In passing the Social
Security Amendments of 1983, Congress accepted President Reagan’s proposal to
delay the 1983 COLA for 6 months, to January 1984, and thereafter to adjust benefits
each January. At the same time it voted an increase of $20 monthly in SSI benefits
($30 per couple), payable in July 1983.
States that supplement SSI benefits are required to “pass through” to recipients
an increase in the federal basic benefit.6 However, when Congress deferred the 1983
COLA and instead enacted the $20 benefit increase (about 7%), it required states to
pass through only about half this amount (the 3.5% increase that the regular COLA
would have yielded). As of January 1999, state supplements for aged persons living
independently were offered in 25 states and ranged from $1.70 in Oregon to $362 in
Alaska.
To assure some gain from work, SSI disregards a portion of recipients’ earnings,
namely, $65 per month, plus 50% of the balance.7 Because of this rule, aged SSI
recipients without Social Security benefits or other unearned income who work
remain eligible for a declining SSI payment until gross earnings equal double their
basic benefit plus $85 monthly.8 In a state that does not supplement the basic federal
benefit, the gross income limit in 1999 for an aged SSI recipient with only wage
income is $1,085 monthly in earnings. The gross income limit is higher in states that
supplement the federal benefit. Thus, in Alaska the limit is $1,809 monthly in earnings
(double the federal-state SSI benefit of $862, plus $85).
5
The law requires a one-third SSI benefit reduction for those who live in another person’s
household and receive support and maintenance in kind from him.
6
The requirement for passthrough can be satisfied by any one of the following three
conditions: (1) if a state’s total spending for SSI supplements during the relevant 12-month
period is not below that for the preceding 12 months (P.L. 94-585) or (2) if state SSI
supplementary payment levels equal those in effect in March 1983 (P.L. 98-21).
7
For blind or disabled recipients, the law provides additional deductions from earnings.
Blind: disregard the first $65 earned, plus one-half of the rest, plus reasonable work expenses.
Disabled: disregard the first $65 earned, work and living expenses caused by the disability,
plus one-half of the rest. For both blind and disabled SSI recipients, income needed for the
fulfillment of a self-support plan approved by the HHS Secretary also is disregarded. (The
special expense deduction for the disabled was enacted in June 1980 as a provision of P.L. 96265.)
8
The $85 disregard consists of the first $20 of any income plus $65 in earnings.
CRS-66
In all but 12 states9 SSI recipients automatically are eligible for Medicaid. In the
12 states with more restrictive eligibility rules, states must deduct medical expenses
of SSI recipients in determining their countable income.
Disabled SSI recipients whose counted monthly earnings exceed the $700
“substantial gainful activity” test that determines disability status are eligible for
special cash benefits (calculated as though they still had disability status), as long as
their gross earnings are below the regular SSI ceiling ($1,085 in 1999 in a state
without supplementation). The special cash benefit preserves Medicaid eligibility for
the disabled worker.10 In 1996 (P.L. 104-121), Congress ended SSI (and Social
Security Disability Insurance) benefits for persons disabled because of their addiction
to drugs or alcohol.
In December 1998, federally administered SSI benefits went to 6,566,069
persons,11 including 887,066 children. Benefits averaged $277 to aged recipients,
$390 to the blind, and $380 to the disabled (and $442 for children). About 36% of
the Nation’s SSI recipients of federally administered payments also receive Social
Security, and 4.7% have earnings (September 1998 data). As of December 1998, SSI
checks were supplementary to Social Security benefits for 61% of aged SSI
recipients, 35% of blind recipients, and 30% of disabled recipients. In September
1998, income was earned by about 2% of aged recipients and by 7.7% and 5.3%,
respectively, of the blind and disabled. Social Security benefits of dual recipients
averaged $370. Earnings of SSI recipients averaged $293.12
FY1998 SSI expenditures totaled $33.6 billion (federal funds, $29.7 billion; state
funds, $3.9 billion). Federal SSI spending represented 1.8% of all federal outlays.
Note: See also CRS Report 94-486, Supplemental Security Income (SSI): A
Fact Sheet, by (name redacted).
9
Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North
Carolina, North Dakota, Ohio, Oklahoma, and Virginia.
10
The Balanced Budget Act of 1997 allows states to provide Medicaid to disabled persons
who lose SSI eligibility because of earnings if their incomes do not exceed 250% of the federal
poverty guidelines. In late November 1999, both Houses of Congress passed H.R. 1180, the
Ticket to Work and Work Incentives Improvement Act, which allows states to provide
Medicaid to disabled working persons with incomes above 250% of the poverty guidelines.
11
In December 1996, 63,472 other persons received only state-administered supplementary
SSI benefits.
12
U.S. Dept. of Health and Human Services. Social Security Administration. Social
Security Bulletin, v. 59, no. 4, winter 1996.
CRS-67
11. Earned Income Tax Credit (EITC)1
Funding Formula
This benefit is 100% federally funded. Outlays for tax year 1998 were $25.3
billion.
Eligibility Requirements2
The Earned Income Tax Credit (EITC) is available to a parent (or parents) with
earnings whose annual adjusted gross income (AGI) is not above statutory limits
($26,928 in 1999, $30,580 for families with more than one child) and who maintains
a residence for a child who can be claimed as a dependent of the tax filer(s). A small
EITC also is available to workers ages 25 through 64 who have no eligible children
and whose AGI is less than $10,200.3 The EITC is a “refundable” credit. Unlike
most tax credits, a person need not owe or pay any income tax to receive the EITC.
However, an eligible worker must apply for the credit, either by filing an income tax
return at the end of the tax year or by filing an earned income eligibility certificate
with an employer for advance payment of the credit.4 To be eligible for the EITC,
married couples generally must file a joint income tax return.
In 1995, Congress established a limit on investment income for EITC eligibility.5
The 1996 welfare reform law changed filing procedures to make it less likely that
undocumented workers could gain access to the EITC. In 1996 and 1997, Congress
broadened the definition of income used to phase out the EITC for filing units above
the phaseout income threshold.6
In response to an IRS study indicating a high incidence of tax filers claiming
mo
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